Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

KING'S COLLEGE LONDON BILL [Lords]

Order for Third Reading read.

Queen's Consent, on behalf of the Crown, signified.
Read the Third time, and passed, with amendments.

NOTTINGHAMSHIRE COUNTY COUNCIL BILL [Lords]

Read the Third time, and passed, with amendments.

Oral Answers to Questions — SOCIAL SERVICES

Free Telephone Information and Advice Service

Mr. Thurnham: asked the Secretary of State for Social Services if he has plans to provide the free telephone information and advice service in the Bolton area.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): A free telephone information and advice service is available both in the Bolton area and throughout the country. A member of the public has only to dial 100 and ask the operator for Freefone DHSS.

Mr. Thurnham: Will my hon. Friend consider giving additional publicity to the Freefone service in the Bolton area, which has the largest DHSS office in the north-west region?

Mr. Whitney: We shall certainly consider anything that we can do. The regional information officers are active in giving publicity to the Freefone service, and certainly the Bolton Evening News and all the relevent television and radio programmes have carried information about the service.

Children's Homes

Mr. Bellingham: asked the Secretary of State for Social Services whether he is satisfied that there are satisfactory procedures available to prevent unsuitable people being employed in children's homes.

Mr. Cohen: asked the Secretary of State for Social Services what arrangements he has made to review the disclosure of criminal records to social services departments.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): While I am generally satisfied that local authorities, which are

responsible for the selection of their own social services staff, and voluntary organisations, exercise proper care in recruiting persons for work in connection with children, I accept that procedures could be improved to assist them in that task. The review of disclosure of convictions policy established by my right hon. and learned Friend the Home Secretary, with which our Department is actively involved, is considering ways in which this can best be achieved.

Mr. Bellingham: Is my hon. Friend aware of my interest in the Marsh House hostel for mentally handicapped children in King's Lynn? He will be aware that Norfolk county council is in the process of appointing a new head. In the light of previous experience, it is imperative that a person of extremely high calibre is appointed. What can my hon. Friend do to help?

Mr. Patten: I am aware of my hon. Friend's deep concern about Marsh House, which is in his constituency. He has made that known through correspondence with me and my Department. We are happy to assist Norfolk county council in any way that we can to get the right person for the job. The consultancy service, which my Department offers to social services departments worried about people being put in charge of or having access to children, is widely used. During 1984 there were some 12,000 references, and the rate of references to that service this year is growing yet again.

Mr. Rowe: Is my hon. Friend aware that a considerable number of people employed professionally in residential homes are pressing hard for some sort of centralised recording system for people with criminal records? Will he give an assurance that he is consulting them on this difficult matter?

Mr. Patten: Obviously, I appreciate my hon. Friend's concern and the rightful concern of the highly professional and dedicated people who work in our children's homes throughout the country. The review that my right hon. and learned Friend the Home Secretary is at present conducting is addressing itself to exactly the issue that my hon. Friend has raised. We hope to have a report within the next couple of months.

Limited List Drugs

Mr. Hirst: asked the Secretary of State for Social Services what progress has been made in appointing an independent expert group to review the list of non-National Health Service drugs on a continuing basis in the light of experience of the operation of the limited list.

The Minister for Health (Mr. Kenneth Clarke): We hope to make an announcement shortly on the setting up of a committee to keep the selected list under review, and to ensure that it continues to meet all clinical needs at the lowest possible cost to the National Health Service.

Mr. Hirst: Does my right hon. and learned Friend agree that in view of the anxious letters that many hon. Members have received about the operation of the limited list it is essential that the independent body starts its work as quickly as possible? Will he assure me that the British Medical Association will be fully co-operating in it? Will he ask the group to study the position of oral mucolytics as a matter of urgency? Finally, will he assure me that the group will contain a Scottish representative, as we have a separate list in Scotland?

Mr. Clarke: We are receiving some representations, but I think that the introduction of the selected list is going remarkably smoothly. I am glad to say that the bulk of the medical profession is co-operating in its introduction, as it promised to do. There is a genuine difference of medical opinion about Mucodyne and other similar preparations. The unanimous opinion of our experts was that it had no established clinical value in the treatment of glue ear and other conditions, but that is the first issue that our new committee will examine when it reviews the present list. We are about to consult on the exact membership. I shall bear in mind the needs of other countries.

Mr. Carter-Jones: Will the Minister assure the House that when there are no alternatives to expensive drugs such as cyclosporin, they will not be removed from the list?

Mr. Clarke: We have not removed from the list any drugs for which, according to the best expert advice that we can obtain, there is no alternative. The point of having the new committee is to take that advice and keep it up to date.

Mr. Latham: Is my right hon. and learned Friend aware that I do not want to have to write to him and wait weeks for a reply, or table parliamentary questions about this matter? What we need is an early and efficient system that will deal with the matter as quickly as possible at local level.

Mr. Clarke: My hon. Friend tends to press me in letters and in every other way on whether we need an appeals system for individual cases. The fact is that we immediately consulted the BMA when it asked for such a system. We made an extremely reasonable offer, which was described as a climb-down by some of its representatives. However, the climate of medical opinion has changed. My latest information is that it is likely to say that there is no need for such an appeal system. The matter is not in my hands.

Mr. Wallace: The Minister has just mentioned the appeals system. Will he go ahead and implement it unilaterally and allow doctors who wish to use it for the benefit of individual patients the opportunity to do so?

Mr. Clarke: I have to wait for the formal response from the committee which represents general practitioners, with which I negotiated the arrangements, but I repeat that in the substantial body of medical opinion some have never seen the need for such a system, and that a growing number do not see the need for such a system now. We have to be guided in those matters by the best expert medical and scientific advice that we can obtain. We have to be influenced by the votes cast by the representative committee, representing all GPs.

Mr. John Mark Taylor: Will my right hon. and learned Friend reassure me that when the independent review group gets to work — we hope as soon as possible—if it finds that there are reductions that can still be made in the list it will recommend them, and they will be proceeded with?

Mr. Clarke: I entirely accept my hon. Friend's point. The point of continuing the review will be to make sure that we have everything that the patients need on the list, and that we continue to provide those drugs in the most cost-effective way. I think that our estimates of savings

will go up in future years as more generic alternatives to some of the branded products that are on the list at the moment come on to the market.

Mr. Pavitt: In view of the general uncertainty in the profession about the appeals procedure, will the committee examine the possibility of having an across-the-board generic substitution, with the general practitioner having the right to say that there is to be no substitute, which would preserve the best of both worlds?

Mr. Clarke: As I have not yet had a final response from the General Medical Services Committee I am not sure whether it is right to describe the present position as uncertain. No doubt I shall eventually get a certain response to the reasonable offer that we have made. I know that there are still advocates in the House of full-scale generic substitution, particularly in the Opposition, but it would have a ruinous effect on a wide range of the pharmaceutical industry and, in the end, could cost the country the introduction of valuable new drugs of genuine therapeutic value.

Mr. Andrew MacKay: Is my right hon. and learned Friend aware that the delay in implementing a review and appeal procedure is doing great damage to the limited list policy, which most of us support?

Mr. Clarke: I am concerned by my hon. Friend's views, but the moment that we were asked to consider the possibility of an appeals system we entered into urgent discussions with the BMA, and my officials and I had meetings in rapid succession with the representatives of the general practitioners. They were unable to give me an answer to the offer until they had had the conference of local medical committees. They still have not given me a final answer. I think that the people with whom I negotiated feel that a reasonable suggestion was made by the Government. It is up to the doctors to decide whether patients need it.

Mr. Boyes: Is the Minister aware that I am surprised at his use of the word "smoothly", when I have not had a letter answered about the matter for some months, except for a single letter from Baroness Trumpington, saying that letters would be answered in the future? If the right hon. and learned Gentleman came to my constituency surgery he would realise how much distress the limited list is causing, not only to my constituents, but to doctors, who are now asking me for appointments because they are against it, too.

Mr. Clarke: My noble Friend's letter is similar to one that I am sending out, too. I hope that it explains to hon. Members the difficulty, which I know everybody is feeling, about answering letters. I hope that people will understand that there are serious practical problems in answering correspondence about individual patient's symptoms, drugs, and treatment. I also note what the hon. Gentleman said about the number of cases with which he has to deal. A great deal depends on the policy adopted by individual practices. Where the doctor advises that a change of drug is called for, little seems to happen to the patients in consequence. In some practices the patients are being told that Parliament has done this or the Government have insisted upon that, and the result is that some patients start to feel uneasy the moment they are subjected to such lobbying.

Patient Statistics

Mr. Knox: asked the Secretary of State for Social Services how many patients were treated in National Health Service hospitals in the most recent year for which figures are available; and how this compares with the figure for 1978–79.

Mr. Kenneth Clarke: In 1983, NHS hospitals in England treated some 6 million inpatient cases, 800,000 day cases and 8·5 million new outpatients. That is 650,000 more inpatient cases, 250,000 more day cases and 600,000 more outpatients than in 1978. Early indications are that hospital activity continued to increase in 1984.

Mr. Knox: Does my right hon. and learned Friend agree that those figures show a remarkable increase in the number of patients treated under the National Health Service since the Government took office? What steps is he taking to ensure that the public know about that great improvement in the NHS?

Mr. Clarke: I am grateful to my hon. Friend for asking a question about the number of patients treated. The critics in the Opposition tend to concentrate on the number of beds, the number of staff employed and other inadequate measures. Like my hon. Friend. I am more concerned about the number of patients being treated than about the quantity of furniture in hospitals.

Mrs. Clwyd: Will the Minister explain why the outpatients' waiting lists in Mid-Glamorgan almost doubled between 1978 and 1984?

Mr. Clarke: I do not answer for Mid-Glamorgan, which is a matter for the Welsh Office. However, we are taking steps to obtain more accurate information about waiting lists, which can be an extremely uncertain measure of demand, depending on the way in which the records in different places are kept.
The important factor is that when we know the length of waiting times and waiting lists for a particular specialty in a particular place, that information should then be used by the health authorities to identify the causes and to take steps by reallocating priorities or altering clinical practices to try to reduce the waiting lists.

Mrs. Currie: Do not my right hon. and learned Friend's figures show that the NHS is not merely safe with us but is thriving and, indeed, doing far better than it ever did under the Opposition when they were in government?
On the question of waiting lists, is my right hon. and learned Friend satisfied that, with the changes in management, health authorities are using their resources more effectively and also to combat waiting lists in specialties?

Mr. Clarke: I agree with my hon. Friend that the very welcome increase in the number of patients being treated is the result of more money being spent on the NHS and better management and use of resources. I do not believe that the Opposition could rival that, given their pledge to restore the old bureaucracy and end the search for cost-effectiveness in the support services. Their spokesman seems more anxious to assure the trade unions that all will go back to the previous arrangements than to concentrate on what is needed to improve the NHS.

Mr. Meadowcroft: Why does the Minister continue to cling to the notion that the number of patients treated is

an indicator of the health of the nation? For example, the clinicians in my area are pleased that the number of people dialysed for renal defects is declining because of the number of transplants. It is by no means an indicator of the improving health of the nation.

Mr. Clarke: There are other health indicators and we must keep an eye on them. Although we treat more patients, new demands arise as doctors make more advances. The number of new renal patients has doubled during our period of office. As the hon. Gentleman rightly says, the number of kidney transplants is now higher than ever before and much higher than anywhere else in western Europe. Although that does not mean that we have satisfied all the demands, it does mean that the NHS is in a very much better state than it has ever been before.

Mr. Peter Bruinvels: Can my right hon. and learned Friend confirm, or deny, that the second surrogacy baby has been born in a NHS hospital, and will he ensure, when considering NHS patients coming forward in the next few months, that neither of the next two surrogacy arrangement children will be allowed to be born in such hospitals when money is being paid on a commercial basis and advantage is being taken of the free NHS service?

Mr. Clarke: I appreciate my hon. Friends strong feelings on the subject, but I urge him to consider the consequences of his suggestion. When an expectant mother presents herself for antenatal care and help with the delivery, it is the duty of the hospital to provide that necessary care and not to refuse it because of the background circumstances. On the other hand, I agree with him in deploring the commercial element in both the births that have taken place so far, and I hope that the measures that are at present in another place will bring that to an end.

Mr. Dobson: Before the Minister covers himself entirely in a halo of glory because of the hard work of those employed in the National Health Service, will he appreciate that if more people are visiting their GPs and more are receiving outpatient and inpatient treatment, that means that more people are sick? Will he ask what is causing that?

Mr. Clarke: I accept from the hon. Gentleman that we should pay tribute to the staff of the NHS in achieving these improvements. The figures are a tribute not only to the doctors and nurses but to all who work in the service. The second part of his supplementary question is idiotic and ridiculous if his only answer to the figures showing increased numbers being treated under the NHS is to claim that more people are becoming ill. He will have to do better than that.

Child Benefit

Mr. Heathcoat-Amory: asked the Secretary of State for Social Services what is the estimated cost of child benefit in the current year.

Mr. Whitney: It is estimated that expenditure on child benefit in 1985–86—the current financial year—will be £4·4 billion.

Mr. Heathcoat-Amory: Will my hon. Friend confirm that most of that huge sum goes to families who are well above the supplementary benefit level? Is it sensible to churn money around the system so indiscriminately?

Mr. Whitney: My hon. Friend will have noted the examination of that proposition in the Green Paper and the fact that we remain dedicated to the existing structure and basis of child benefit. If child benefit were taxed, the effect on the great majority of working families would be the equivalent of a 30 per cent. reduction in child support.

Mr. Frank Field: What arguments has the Minister found to be the most effective in his attempts to defend the universality of this benefit?

Mr. Whitney: I refer the hon. Gentleman to the discussion of that point in the Green Paper. I repeat, we have concluded at this stage that we shall retain the structure and basis of child benefit.

Mr. Andrew Bowden: Will my hon. Friend explain why it is fair and reasonable to pay child benefit to those earning £10,000 or £20,000 a year when he intends to cut housing benefit for pensioners on low incomes?

Mr. Whitney: This is going over the same ground. The arguments on housing benefit are clearly set out in the Green Paper. Our dedication to child support and the family has been a consistent and reiterated principle of this Administration.

Mr. Wigley: Is the Minister aware that child benefit is usually paid to women and that, if there are changes in the structure, women could suffer unless both the value of the benefit and the means of payment are safeguarded to ensure that it goes to them?

Mr. Whitney: That point has consistently been taken into account. It takes us into the area of individual responsibility between husband and wife within the family.

Tax and National Insurance Systems (Integration)

Mr. Eggar: asked the Secretary of State for Social Services what representations he has received about the integration of the tax and national insurance systems.

The Minister for Social Security (Mr. Tony Newton): The review team looking into benefits for children and young people received a considerable number of representations advocating the integration of the tax and benefit systems. The review team also heard oral evidence on the subject during its public sessions.

Mr. Eggar: Will my hon. Friend confirm that it is the Government's long-term intention to integrate the tax, benefit and national insurance systems? Will he give an undertaking that nothing will be introduced in the next two years which would make eventual integration more difficult?

Mr. Newton: It is the Government's intention to bring about closer co-ordination between the tax and benefit systems, and the review proposals contain two important steps in that direction. They are the family credit proposals and, not least, the proposal to change the social security uprating year to the same as the tax year. My hon. Friend may rest assured that we shall continue in that spirit.

Mrs. Beckett: Does the Minister recall that, when it was decided to adjust the national insurance system by giving employers a rebate for a year to compensate them for the introduction of 28 weeks' statutory sick pay, the Government made a great point of the fact that the SSP

measure imposed a burden on employers for which they would be recompensed? What recompense do the Government expect to give? How much will it cost to compensate employers for having to administer the new family credit scheme?

Mr. Newton: In proposing the extension of the SSP scheme and the national insurance contribution reduction, the Government laid emphasis on their general desire to reduce employment costs, with the aim of seeking to promote employment. The hon. Lady's point about cost was incidental to that. In the light of experience with SSP, I have no reason to suppose that employers will not readily be able to operate the family credit scheme.

Mr. Galley: Does my hon. Friend accept that the main difficulty with the family credit scheme will be take-up? There is nothing intrinsic in the new scheme proposed in the Green Paper that will increase take-up. Does my hon. Friend agree that the problem of family poverty will not be resolved until we have at least partial integration of the tax and benefits systems for child benefit, family credit and taxation?

Mr. Newton: Although I would hesitate to describe it as integration, it is of considerable significance that the proposed method of paying family credit is by directly offseting the tax and national insurance contributions that the beneficiary would otherwise pay. That will be a significant step forward in simplifying receipt of the benefit and in encouraging take-up.

Social Security Reform

Mr. Patrick Thompson: asked the Secretary of State for Social Services what representations he has received about his proposals in the Green Paper, "Reform of Social Security" to alleviate poverty for low-income families with children.

The Secretary of State for Social Services (Mr. Norman Fowler): The proposals have attracted widespread attention and debate in the two weeks since the Green Paper was published. The period of consultation will go on until mid-September.

Mr. Thompson: As more than half of those on low incomes are families with children, will my right hon. Friend press on with his proposals, through family credit, to eliminate the poverty trap and to increase incentives to work? This will not only be fairer, but will improve employment prospects.

Mr. Fowler: Family credit is one of the most important proposals in the Green Paper. It will tackle both the poverty trap and the unemployment trap. It will end the situation where people can be better off on benefit than in work, and I think that both sides of the House would want that.

Dr. McDonald: Is the right hon. Gentleman aware that the great mistake with the family credit system is that benefits designed to meet the needs of children will no longer be payable to the mothers? Will the right hon. Gentleman cast his mind back to the 1973 Tory proposals, when women made known their opposition to that proposal in the tax credit scheme? Is he aware that women will oppose this proposal for the family credit scheme and will ensure that benefits designed for children are payable to the mothers? Is the right hon. Gentleman aware that this proposal will fail for that reason once again?

Mr. Fowler: I certainly do not accept that the hon. Lady has a right to speak on behalf of all women. One of the difficulties about family income supplement, which family credit replaces, which both parties have faced, is low take-up. Before the hon. Lady goes off into her essays on what is wrong with family credit, it is incumbent upon her to make proposals that will help low income families.

Mr. Leigh: Will my right hon. Friend explain what rational justification there is for taxing impoverished young people into the poverty trap while subsidising the child bearing of duchesses with universal child benefits, except perhaps the desire to prevent them from falling into the rubbery arms of the Liberal party?

Mr. Fowler: I do not know about the last point. The fact is that child benefit provides the only recognition in the tax or benefit systems of the extra cost of having children. That is a good principle. We would be alone among almost all the countries of western Europe if we turned our backs on child benefit.

Mr. Allan Roberts: Does the right hon. Gentleman agree with the British Association of Social Workers, which says that now that claimants who previously received benefits as of right will have to pass a means test to receive benefits from the social fund, a management review of the decisions that will affect those claimants will be inadequate and that there should be an independent appeals machinery to review the decisions?

Mr. Fowler: The review process will be adequate to check the administration of the social fund, which will provide better help in many areas for whole groups of people, irrespective of whether they are in or out of work.

Sir William Clark: Will my right hon. Friend tell the House how much extra revenue will be raised if child benefit was still paid to mothers but taxed as income?

Mr. Fowler: I do not have the figures, but the effect of my hon. Friend's suggestion would be to reduce the take-home pay of all heads of families throughout the country. We should need to think twice before doing that.

Mr. Meacher: If the figures can be given in November, why can they not be given now? What is it that will be known in November 1985 that is not known in June? Is it not absurd that the figures are to be given only after the consultation period is supposed to have ended? Is it not obvious that a cover-up of this kind can be explained only by the fact that the Government have a great deal to hide?

Mr. Fowler: We have made it absolutely clear from the beginning that we want a debate to take place on the new structure that is set out in the Green Paper. We have also made it clear that when the White Paper is published in the autumn we shall set out a range of illustrative rates. The hon. Gentleman referred to a cover-up. I seem to remember that two months ago the hon. Gentleman put forward proposals on behalf of the Labour party. We have not heard a dicky bird about those proposals since. I challenge the Labour party to publish the hon. Gentleman's proposals.

Mr. Meadowcroft: The Secretary of State gave only a partial response to the question of the hon. Member for Bootle (Mr. Roberts). If there is to be more discretion with

the social fund, will he grapple with the fact that it is crucial that decisions should be able to be challenged in a tribunal on the ground of reasonableness?

Mr. Fowler: I shall look at the suggestion that the hon. Members for Leeds, West (Mr. Meadowcroft) and for Bootle (Mr. Roberts) have made on this point. However, I hope that the hon. Member for Leeds, West will accept that we do not want to return to a situation in which inflexibility leads to a decision that is made in one part of the country being applied thoughout the rest of the country. I believe that we want to move away from that unsatisfactory position.

Mr. John Townend: Does my right hon. Friend agree that one of his first priorities should be to deal with the problem of the working poor? If his reforms are to deal with that problem, it is essential that the substantial savings on social security benefits should be used to eliminate taxation on the working poor.

Mr. Fowler: The major problem over the working poor is to define low income families with children. Family credit seeks to deal with that problem.

Invalid Care Allowance

Ms. Richardson: asked the Secretary of State for Social Services what action he proposes to take to implement the EEC directive on equal treatment in respect of the invalid care allowance.

Mr. Whitney: The question whether the European Community directive on equal treatment in matters of social security applies to invalid care allowance has been referred to the European Court by the Social Security Commissioner in the case of Mrs. Drake. Any action will depend on the outcome of the commissioner's decision.

Ms. Richardson: It is not absurd that the Government continually wait to be taken to the European Court before they administer social justice? Why should married and cohabiting women, to whom this allowance should have been applied so long ago, have to wait until the Government are dragged through the courts before they receive justice?

Mr. Whitney: I remind the hon. Lady that it was the Labour Government who excluded married women from the provision of invalid care allowance and that to implement this measure would result in a ninefold increase of expenditure under this head: from £11 million to £85 million a year.

Private Chiropodists

Mr. John Carlisle: asked the Secretary of State for Social Services whether it is his policy to encourage district health authorities to reduce the numbers of private chiropodists now involved in contract work for those authorities.

Mr. Kenneth Clarke: Our policy is to encourage the provision of chiropody in the most cost-effective manner. It is for each district health authority to decide to what extent it should make use of directly employed chiropodists as opposed to private chiropodists on a contractual or sessional basis.

Mr. Carlisle: Does my right hon. and learned Friend agree that the decision by certain health authorities,


including south Bedfordshire, to reduce the number of private chiropodists in service is against Conservative policy of encouraging the private sector? Is he convinced that this will save money and will he give an assurance that no authority will be allowed to make such a change without close monitoring by him or by the Department?

Mr. Clarke: I have not gone into the full details in relation to south Bedfordshire, and I have seen no evidence to justify intervening, but if money can be saved which can then be spent on the rest of the community health service as a result of reducing the proportion of chiropodists employed on a contractual basis it may be entirely consistent with our policy. It can be very expensive to pay items of service fees to chiropodists on a contractual basis, and in some circumstances a better service can be provided by employing more in-house staff.

Mr. Pavitt: Will the right hon. and learned Gentleman advise district health authorities that when private contractors are employed there should be a differential scale as between those who are state qualified and registered and those who are not, just as a state registered nurse has a different rate of pay from that of a state enrolled nurse?

Mr. Clarke: The National Health Service uses only state registered chiropodists, whether in-house or on a contractual or sessional basis. I should like to see more use of foot care assistants for the less serious work, as that would help to provide a more cost-effective service and to extend the range of service provided for patients.

Mr. Galley: Will my right hon. and learned Friend confirm that neither he nor the health authorities have policies which discriminate against the employment of privately trained chiropodists and that he will not introduce discriminatory policies such as a tightly drawn registration system?

Mr. Clarke: I fear that the Health Service is already restricted to state registered chiropodists as a result of regulations passed in the late 1970s. I am aware of the dispute between different branches of the profession and about the type of training given to state registered chiropodists and others, but at present I see no case for intervening in Health Service arrangements, which have been running for some years.

Mr. Dobson: Is the right hon. and learned Gentleman aware that about 2,000 of the existing 5,000 chiropodists are likely to retire in the next few years and that if we do not put more money and effort into a massive increase in the training of chiropodists we shall not have even the limited number that we now have?

Mr. Clarke: Steps are in hand that may lead to the opening of two new skill schools, and the number of chiropodists in training continues to rise. We are also encouraging National Health Service chiropody by accepting the review body's recommendation on the pay of chiropodists in service so that some of the more senior will receive up to 16 per cent. increases in pay by the end of this financial year.

Family Credit Plan

Mr. Kennedy: asked the Secretary of State for Social Services if he will consider adapting the proposed family credit plan in the social security Green Paper to

enable mothers to claim directly the benefits for children which are currently proposed to be made payable through the pay packet of the wage earner.

Mr. Newton: Paying the proposed family credit through the pay packet is an important element in making the credit more effective than family income supplement has proved and in developing sensible co-ordination between the tax and social security systems. It could, of course, be paid to the mother where she is a wage earner.

Mr. Kennedy: I fully accept the point about the low take-up of family income supplement, but does the Minister agree that paying family credit through the wage packet may not overcome that problem, because a great deal will depend on the co-operation of employers? Does he also agree that in nine cases out of 10 it makes eminent sense for the mother, as the caring parent, to have direct access to funding for her children?

Mr. Newton: We have planned the new benefit with the hope and intention that take-up of family credit will be better than that of family income supplement, and we believe that the proposed mechanism will assist in achieving that objective. As for who should receive it, I remind the hon. Gentleman that the payment of child benefit will continue to go to the mother. Moreover, as has already been said, I believe that it is more realistic to regard the upbringing of children as a joint responsibility for both parents, and I think that that is how most families think of it.

Mr. Alfred Morris: Can the Minister give us a firm assurance that the Government's proposals in the Green Paper will not be allowed to result in any reduction in real terms of the totality of expenditure on cash benefits for disabled children and their families?

Mr. Newton: The right hon. Gentleman will know that, given that we do not intend to attempt to settle detailed benefit rates until we have made decisions about the structure, I cannot give him a direct answer to that question. He will, however, have heard my speech in the debate last week when I made it clear that I would expect disabled people generally to be among those whose position would be improved by our proposals.

Nebulisers

Mr. Skinner: asked the Secretary of State for Social Services whether he will now make provisions for nebulisers to be allocated on prescription within the National Health Service.

Mr. Kenneth Clarke: If a hospital consultant considers that it is clinically essential for a patient to practise nebulisation at home, the health authority may supply the equipment. We consider that this is the most efficient and cost-effective way of providing nebulisers and their driving mechanism on the NHS.

Mr. Skinner: Is it not a sorry state of affairs that there are people who are coughing their lungs up, people who have had asthma all their lives, and cannot get a nebuliser? A 22-year old girl in my constituency of Pinxston pleaded for a nebuliser to be provided under the scheme to which the Minister has just referred, but was refused. The people of Pinxston got together and collected the money to try to save her life, only to see that young girl die within a few months. That is the real story about nebulisers, not all that


guff that the Minister has just trotted out. The truth is that he ought to be giving directions to all health authorities to provide nebulisers to save the lives of young men and women and miners who are riddled with emphysema and coughing their lungs up.

Mr. Kenneth Clarke: The hon. Member well knows the other story about nebulisers, which is that of Mr. Gibson, his constituent. We are making sure that if a consultant says that he needs a nebuliser, he will get it on the Health Service. The hon. Member therefore immediately turns to another story, that of a girl in Pinxston. That is why the hon. Member asked his question, because he has not put it to me before. We are sorting out all the cases in north Derbyshire and Nottinghamshire that have been put to us and, if a consultant agrees that a patient needs a home nebuliser, of course we shall ensure that the health authority provides it. We can sort out the problems if the hon. Member will put the cases to us in a proper way and not seek to exploit them for his own purpose.

Income Support System (Pensioners)

Mr. Andrew Bowden: asked the Secretary of State for Social Services how the income support system outlined in his Green Paper will affect pensioners who are entitled to claim supplementary pension at the present time but do not do so.

Mr. Newton: Precise estimates cannot be made, but I would expect the simpler income support structure to make it easier for prospective claimants to judge their entitlement.

Mr. Bowden: Is my hon. Friend saying that when this new scheme conies into operation, if it does, there is a very good chance that the 1 million pensioners who today could be claiming a supplementary pension but are not doing so will get their full rights?

Mr. Newton: The evidence suggests that take-up of supplementary pension among potential supplementary pensioners has improved, on the latest, somewhat out-of-date, figures that we have, following the changes that we made in 1980. In my view, this move to an even more clearly regulated system of entitlement should assist further to that end.

Mr. Meacher: Will the hon. Gentleman confirm that of the 7 million people who will have their housing benefit cut, 4 million are pensioners? Will he also confirm that, of the 1·8 million households that will lose housing benefit altogether under the Green Paper proposals, the great majority are pensioner owner-occupiers, especially widows, with a small occupational pension and a total income of only £60 or £70 a week?

Mr. Newton: Since, as the hon. Gentleman knows, the effects of the housing benefit proposals depend on the income support rates, and as the income support rates have not yet been set, he should refrain from making these wild generalisations.

Mr. Kenneth Carlisle: Is my hon. Friend aware that one aspect of the Green Paper which pensioners particularly welcome is the provision that pensions will now be uprated in April, rather than having to wait until November, as has happened until now?

Mr. Newton: Yes, indeed. That is a gain, not only for pensioners, who, of course, will have two upratings in a period of 16 months, but in the clarity of the system for all beneficiaries.

Social Security Reform

Dr. McDonald: asked the Secretary of State for Social Services what representations he has received about the Green Paper "Reform of Social Security".

Mr. Newton: I refer the hon. Member to the reply my right hon. Friend gave earlier this afternoon to my hon. Friend the Member for Norwich, North (Mr. Thompson).

Dr. McDonald: Will the Minister give an absolute assurance that the removal of free school meals as part of the family income supplement package, to be replaced by the family credit scheme, will not cause suffering to any poor families?

Mr. Newton: I can give the hon. Lady the assurance that, in setting the family credit rates, we shall take into account current expenditure on free school meals, and that the 30 per cent. of beneficiaries who currently do not claim free school meals will be assisted as a result.

Nursing Supplement

Mr. Hicks: asked the Secretary of State for Social Services whether the Social Security Advisory Committee has recommended that the nursing supplement payable in respect of residents in private nursing homes who are in receipt of supplementary benefit should be increased; and if he will make a statement.

Mr. Whitney: In its report — Cmnd. 9466 — the Social Security Advisory Committee recommended — and the Government accepted—that research should be undertaken urgently to ensure that the nursing home supplement has been set at the appropriate level.

Mr. Hicks: Does my hon. Friend agree that the nursing home supplement differential is inadequate compared to the basic residential scale of payment because of the 24-hour cover that is necessary in nursing homes, with the resulting costly staffing implications?

Mr. Whitney: We took a careful look at this before setting the rate, and we shall continue to monitor it carefully. At the moment we are satisfied that the level is adequate, but we shall continue to keep it under careful review.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Bill Walker: asked the Prime Minister if she will list her official engagements for Tuesday 18 June.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.

Mr. Walker: During my right hon. Friend's busy day will she give consideration to the situation of the Scotch whisky industry, which contributes substantially in jobs, overseas earning and revenue for the tax man? In


particular, will she give consideration to the concern being felt in Scotland at the proposed takeover of Arthur Bell? Is my right hon. Friend aware that whisky does not benefit from being diluted too much, and Scotch whisky has already been too greatly diluted by overseas control?

The Prime Minister: As my hon. Friend is aware, my right hon. Friend the Chancellor of the Exchequer is concerned about the Scotch whisky industry, because he has a great admiration for it and has tried to give some help to it. As to the dilution by the Guinness bid, that will be considered under the Monopolies and Mergers Act by my right hon. Friend the Secretary of State for Trade and Industry. He will be making the decision about whether to refer the case after he has received advice from the Director General of Fair Trading.

Mr. Steel: Before today's debate on the Green Paper, may I ask whether the Prime Minister recalls that in 1973 the Conservative Government discussed the potential for combining the tax and social security systems in one tax credit scheme? Why is it that, 12 years later, with all our computer technology, we are still miles away from that desirable goal?

The Prime Minister: As the right hon. Gentleman is aware, computers were ordered from ICL, and will slowly be coming in. It would not have been possible to carry out that reform before, but before we go into fundamental change, we should look at the consequences of combining the two systems completely.

Mr. Stokes: At a time of increasing terrorism, does my right hon. Friend think it wise that the EC should attempt to abolish controls at all frontiers?

The Prime Minister: This is about the movement of goods. Last time we had a European Council I raised the subject of the need to keep strict controls on frontiers for the movement of criminals, terrorists and particularly drugs. All other Heads of Government agreed with that very much.

Mr. Lofthouse: asked the Prime Minister if she will list her official engagements for Tuesday 18 June.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Lofthouse: Will the Prime Minister consider extending the regional aid programme to mining communities where job opportunities have been wiped out by her policies? If not, what advice would she give to her children if they were unfortunate enough to be in these mining communities with no hope of a job?

The Prime Minister: The hon. Gentleman will be aware that NCB (Enterprise) Ltd. has been set up and some £10 million has already been set aside for it. A considerable number of applications have been made under the scheme and the largest ever contract of its kind, for adult retraining, has now been signed between the National Coal Board and the Manpower Services Commission.

Mr. Sumberg: Will my right hon. Friend take this opportunity to send a message of sympathy and understanding to the American people at this tragic time, and will she tell President Reagan that, if it is his policy not to negotiate with terrorists, it is a policy that has our support?

The Prime Minister: I will, of course, pass on the precise message, which I am sure will be very welcome. We all have great sympathy with the plight of those who are on the hijacked aircraft and the difficulties that face the American Government. I will pass on my hon. Friend's message to President Reagan.

Mr. Tony Lloyd: asked the Prime Minister if she will list her official engagements for Tuesday 18 June.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Lloyd: Is the right hon. Lady aware of the damage that will be done to the Health Service by the decision not to fund the nurses' pay claim? [Interruption.] Is she aware, in particular, that the general manager in the county of Powys is talking about a 12-month curtailment of capital spending, putting back nurse training programmes and a £300,000 cut in facilities for mental health? Can she tell the House what damage her policies will do to the ill and the elderly in Powys?

The Prime Minister: I thought that the hon. Gentleman started off with the nurses' pay claim — [Interruption.] It is not always easy to hear against the background of noise precisely what is being said. May I point out that by February the recommendations of the review body on new scales for nurses will be in full operation. If nurses' pay were at the same real level that we inherited, a nursing sister on the maximum of the scale would be over £2,000 worse off than under the new agreement with this Government.

Mr. Donald Stewart: In view of the continued damage being done by certain aspects of the EC, for instance, by the appalling trade deficit against us and by the promise to reform the common agricultural policy, which never comes to anything, what action does the right hon. Lady intend to take against the latest lunatic suggestion that we might get a rebate provided we give the EC the funds to do so?

The Prime Minister: The 1,000 million ecu rebate will come. As the right hon. Gentleman knows, it has been approved and has been through the European Parliament. With regard to new expenditure under the new agreement, this country will be liable for only 7 per cent. because of the Fontainebleau agreement.

Mr. Michael Forsyth: asked the Prime Minister if she will list her official engagements for Tuesday 18 June.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Forsyth: Is my right hon. Friend aware that, although deficit funding has failed to create jobs in the United States, the tax-cutting programme there has enabled the American economy to create more jobs in May of last year than all the EC countries together have managed in more than a decade? Will she therefore give her urgent attention to implementing a job creation programme in Britain based on similar tax reductions?

The Prime Minister: As my hon. Friend is aware, what we can do on tax cuts depends partly on what we do about public expenditure and the level of borrowing. However, my hon. Friend will be aware that during our time in government successive Chancellors of the


Exchequer have made cuts in income tax worth £6 billion. That is £6 billion less taken in tax than would have been the case had the same structure been in place that was left by the last Labour Government. That is an average of £260 per family for a person on average male earnings. I take my hon. Friend's point that the further reduction of income tax is a considerable priority.

Mr. Kinnock: Talking of gainers and losers, does the Prime Minister recall that two weeks ago I asked her whether she would give us figures for the gainers and losers from the Government's social security review, and she told me:
In accordance with custom … we must wait for the May retail price index figures.".—[Official Report, 4 June 1985; Vol. 80, c. 150.]
Those figures were published last Friday. We are to have the statement on the uprating this afternoon. Why have we to wait another four or five months to get those figures? Why will she not keep the promise that she made to me a fortnight ago?

The Prime Minister: The right hon. Gentleman has got two things muddled up. We had to wait for the May retail prices index figure for this year's uprating, and we shall have to wait for next year's May retail prices index figures for next year's uprating. We must await the decisions on the structure of the changes before we can give a range of illustrative figures. The right hon. Gentleman seemed to approve that approach, because when he was asked last Thursday on the radio to give figures for taxes and contributions for Labour's policies he replied:
I'm not going to put a figure on two or three years' hence".—[Interruption.]

Mr. Speaker: Order. This noise takes up time.

Mr. Kinnock: The Prime Minister's hearing is as selective as her memory. If she looks a little further, she will see that I said that the Government have the figures, the DHSS has the figures, the Cabinet has the figures, and apparently the printers have the figures. Why can we not have the figures? Will she now answer my question about her policy and not refer to the policy of the next Government, which I shall lead?

The Prime Minister: Heaven help Britain if that were ever to happen. The right hon. Gentleman should know by now, in view of his answer, that we can publish a range of illustrative figures only when we know the structure that will come out of the White Paper. Of course, had we been rash enough to give any illustrative figures, they would have been out of date as a result of the upratings that will be announced this afternoon.

Mr. Kinnock: Why is it, since the Prime Minister is now so keen to give illustrative figures, that when I asked her on 4 June whether we could have "dependable estimates", she flatly refused to give them? What has caused her conversion in the meantime?

The Prime Minister: The right hon. Gentleman still does not understand. We must decide the structure and then, bearing in mind the latest uprating figure, a range of figures can be given. That is a great deal better than what the right hon. Gentleman said, which was:
I'm not going to put a figure on two or three years' hence".

Mr. Stanbrook: asked the Prime Minister if she will list her official engagements for Tuesday 18 June 1985.

The Prime Minister: I refer my hon. Friend to the reply which I gave some moments ago.

Mr. Stanbrook: Is my right hon. Friend aware that many people ascribe the causes of rising crime and violence in our society to a long-term moral and religious decline? Does she accept that the chief factor in that is a lack of discipline and of respect for law and order? The Government cannot stand aside from that trend, as my right hon. Friend appeared to imply when she replied recently to the Leader of the Opposition about the causes of violence. Will my right hon. Friend lead a campaign to restore high moral standards?

The Prime Minister: My hon. Friend is totally correct. One cannot have a democracy without a system of self-discipline and without upholding law and order. I hope he accepts that, on every occasion, the Government have upheld law and order and have insisted that we do not obey only some laws, but all of them. I cannot personally lead a moral crusade. In our legislation, we insist on religious education in schools as an example that such things matter a great deal to all Governments.

Mrs. McCurley: asked the Prime Minister if she will list her official engagements for Tuesday 18 June.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mrs. McCurley: Is the Prime Minister aware of the document which the general management council of the Labour party issued to English local government councillors inciting them to break the law and to refuse to follow the Rates Act 1984 so as to thwart the Government? Does this not show a two-faced approach to local democracy—[Interruption.]

Mr. Speaker: Order. It is no good hon. Members saying, "Out of order." I cannot hear.

Mrs. McCurley: Does this not show flagrant contempt for the law?

The Prime Minister: My hon. Friend is correct. The law is indivisible and has to be obeyed. All of the law has to be obeyed. That is what democracy is. There is a chance to change the law, but until it is changed existing law must be upheld, and I totally and utterly condemn anyone opposite—[Interruption.] I totally and utterly condemn anyone who has urged that any law be disobeyed.

Social Security Benefits (Uprating)

The Secretary of State for Social Services (Mr. Norman Fowler): With permission, Mr. Speaker, I should like to make a statement about the annual uprating of social security benefits which takes place in the week beginning 25 November.
The improvements that we are making, which have been allowed for within the Government's public expenditure plans, will increase the Government's social security budget by over £2,000 million in a full year.
As the House will know, the retail price index published last Friday showed a rise of 7 per cent. between May 1984 and May 1985. The Government are pledged to increase pensions and other linked long-term benefits in line with this rise in prices. Accordingly, the retirement pension for a single person will rise from £35.80 to £38.30, an increase of £2.50 a week, while the pension for a married couple will rise fom £57.30 to £61.30, an increase of £4 a week.
This will mean that between November 1978 and November 1985 pensions will have gone up by over 96 per cent. some 10 percentage points more than the expected rise in prices over the same period. Thus, we have more than fulfilled our pledge to protect the retirement pension against rising prices.
Public service pensions will similarly be increased by 7 per cent. We shall also further ease the earnings rule—that is the amount which a pensioner can earn without a reduction of his pension. This will be increased from £70 to £75 a week.
The basic rate of unemployment benefit will be increased by 7 per cent. from £28.45 to £30.45 for a single person and from £46 to £49.25 for a couple.
Supplementary benefit is increased in line with the retail price index excluding housing costs. This is because people on supplementary benefit have their housing costs met separately through housing benefit. All the main supplementary benefit rates will therefore be increased by 5.1 per cent. The long-term scale for a couple will go up by £2.90 to £60 a week. The ordinary scale for a couple will go up by £2.30 to £47.85 a week. The scale rates for children will go up to £18.20 for a child aged between 16 and 17 years, £15.10 for a child aged between 11 and 15 years, and £10.10 for a child under 11.
The extra weekly payments to cover items such as heating and special diets will be increased in the usual way. Heating additions will be increased by 4.4 7per cent. in line with the rise in fuel prices, while the additions for special diets will go up by 3 per cent. in line with the rise in food prices.
I also intend to make a change to the additions which are given to supplementary benefit households with central heating systems. Those special additional payments were introduced in the early 1960s because at that time central heating was more expensive. That is no longer generally true. In the meantime, there has been an extensive development of additional help with heating costs for those such as pensioners and the disabled. Claimants already receiving central heating additions will continue to receive them while they remain on benefit. However, I propose that no further awards of such additions should be made to people claiming on or after 5 August, but the range of automatic heating additions for the special needs of

particular groups will be extended so that from November the lower standard rate of heating addition, which will then be £2·20 a week, will be paid automatically to sick and disabled householders on the long-term rate of supplementary benefit.
Turning to housing benefit, the needs allowances, which are increased according to a formula which takes account of increases in average local authority rents and rates as well as the supplementary benefit rates, will be increased by the full 5·8 per cent. to £47·70 for a single person and £70·20 for a married couple.
The uprating of the housing benefit needs allowances will further increase spending on a benefit which is already paid to well over 7 million households. Expenditure will increase to £4½ billion in a full year. The Government believe that it is right to restrain further growth in housing benefit expenditure. We therefore propose to increase the rates taper above the needs allowance from its current level of 9 per cent. to 13 per cent.
No one on supplementary benefit or with income within £10 of the scale rates will be affected by the change. Indeed, a pensioner couple would need to have an income nearly £13 a week above the retirement pension level before their overall benefit increase was reduced by even lop a week as a result of this change.
The Government believe it right to maintain child benefit for all children, irrespective of the income of their parents. Nevertheless, we have to consider its level both in relation to overall priorities within social security and, in particular, with the aim to do more for families with children on low income.
The Government have concluded that child benefit should be increased in November to £7 a week. However, one-parent benefit will be increased by the full 7 per cent. from £4·25 to £4·55 per week; and families on supplementary benefit will not be affected and will benefit from the increases in the scale rates for children. At the same time, we propose to take two important steps to give additional help to less-well-off families with children.
First, the prescribed amounts in family income supplement will be increased by more than 7 per cent. to give all FIS families extra help. In addition, we shall introduce new higher prescribed amounts for families with older children. That will mean, for example, that the prescribed amount for a child aged between 11 and 15 years will be increased by an extra £2 and for a child aged 16 and over by an extra £3 a week ahead of prices.
Secondly, we shall increase the child's needs allowance in housing benefit to £14·50 per week—£1 a week more than the normal uprating would have required.
Taken together with the reduction in national insurance contributions for lower paid workers announced in the Budget, those two measures are further steps towards reducing the unemployment trap and directing help more effectively to the families most in need.
Benefits for disabled people, war pensioners and war widows will all be increased by 7 per cent. This will mean that the pension for a war widow will go up to £49·80, the higher rate of attendance allowance will increase to £30·60 a week and mobility allowance will go up to £21.40.
For invalidity benefit, the Government propose to make a total increase of 12 per cent. This will restore the 5 per cent. abatement as well as giving the full 7 per cent. uprating. It will mean that invalidity benefit will increase from £34·25 to £38·30 for a single person and from £54·80 to £61·30 for a married couple. This will bring it in line


with retirement pension once more and give an increase of £4·05 a week for a single person and £6·50 for a married couple.
I should also take this opportunity to tell the House that it is our intention to take powers to increase the £10,000 vaccine damage payment, which has remained at that level since 1979, to £20,000.
The measures announced in this statement will add over £2 billion to the social security budget. The result is that the budget will now stand at over £42 billion a year, almost a third of all Government spending. I shall be laying a schedule giving the increases in the main benefit rates before the House.
As I have already told the House, this will be the last time that benefits are uprated in November. Next year an

uprating will take place in July before the new annual cycle based on April begins in 1987. The Government will be introducing an amendment to the Social Security Bill in another place to enable this change.
Had we continued with the unreliable forecast method of uprating introduced by the last Labour Government, the uprating of benefits that I am announcing today would be substantially less. As it is, this uprating will protect those people in greatest need, give extra help to many disabled people and fulfil our pledges to the pensioners of this country.

Following are the main social security and housing benefit rates:





Existing weekly rate £
Proposed weekly rate £


Main contributory and non-contributory rates




Child benefit




Each Child
6·85
7·00


One parent benefit




First or only child of certain lone parents
4·25
4·55


Standard rate of retirement * and widows pensions, and widowed mothers allowance




Single person
35·80
38·30


Wife or adult dependant
21·50
23·00


Earnings limit for retirement pensioners
70·00
75·00


Standard rate of invalidity pension




Single person
34·25
38·30


Spouse or adult dependant
20·55
23·00


Invalidity allowance




(i) Higher rate
7·50
8·05


(ii) Middle rate
4·80
5·10


(iii) Lower rate
2·40
2·55


Standard rate of unemployment benefit Beneficiary under pension age




Single person
28·45
30·45


Wife or other adult dependant
17·55
18·80


Beneficiary over pension age




Single person
35·80
38·30


Wife or other adult dependant
21·50
23·00

Standard rate of sickness benefit Beneficiary under pension age


Single person
27·25
29·15


Wife or other adult dependant
16·80
18·00


Beneficiary over pension age




Single person
34·25
36·65


Wife or other adult dependant
20·55
22·00


Widows allowance (first 26 weeks of widowhood)
50·10
53·60


Maternity allowance
27·25
29·15


Attendance Allowance




Higher rate
28·60
30·60


Lower rate
19·10
20·45


Severe disablement allowance
21·50
23·00


Retirement pension for persons over pension age on 5 July 1948 and persons over 80*
21·50
23·00


Therapeutic earnings limit
23·50
25·00


Invalid care allowance




Increase of invalid care allowance for wife or other adult dependant
12·85
13·75


Mobility allowance
20·00
21·40


Guardians allowance/child's special allowance
7·65
8·05


Rate of the child addition to windows, invalidity, and retirement pensions, invalid care allowance and severe disablement allowance and unemployment and sickness benefits where claimant is over pension age
7·65
8·05






Existing weekly rate £
Proposed weekly rate £


Industrial injuries benefits




Disablement benefit (100 per cent. assessment)
58·40
62·50


Unemployability supplement
34·25
38·30


Special hardship allowance (maximum)
23·36
25·00


Constant attendance allowance/exceptionally severe disablement allowance
23·40
25·00


Industrial death benefit widows pension




First 26 weeks
50·10
53·60


Higher permanent rate
36·35
38·85


Lower permanent rate
10·74
11·49


Main supplementary benefit rates




Ordinary rate




Couple
45·55
47·85


Person living alone
28·05
29·50


Non-householder 18 and over
22·45
23·60


Non-householder 16–17
17·30
18·20


Any other person aged 11–15
14·35
15·10


Any other person aged under 11
9·60
10·10


Long-term scale rate




Couple
57·10
60·00


Person living alone
35·70
37·50


Non-householder 18 and over
28·55
30·00


Non-householder 16–17
21·90
23·00


Board and lodging limits




Ordinary board and lodging
† £45·00 to
£70·00


Hostels
£70·00



Residential care homes
£110·00 to
£170·00


Nursing homes
£138·60 to
£198·60


Heating additions




Lower rate
2·10
2·20


Higher rate
5·20
5·45


Central heating additions




Lower rate
2·10
2·20


Higher rate
4·20
4·40


Estate rate heating additions




Lower rate
4·20
4·40


Higher rate
8·40
8·80


Housing benefit needs allowances




Single person
45·10
47·70


Couple/single parent
66·50
70·20


Single handicapped person
50·30
53·20


Couple, one handicapped/single handicapped parent
71·70
75·70


Couple, both handicapped
74·15
78·25


Dependant child addition
12·85
14·50


Main increased war pension rates




Disablement pension for Private or equivalent (100 per cent. assessment)
58·40
62·50


Age allowance with assessment of:




40 per cent. to 50 per cent.
4·05
4·35


Over 50 per cent. but not more than 70 per cent.
6·35
6·80


Over 70 per cent. but not more than 90 per cent.
9·10
9·75


Over 90 per cent.
12·70
13·60


Unemployability allowance




Personal allowance
38·00
40·65


Increase for wife or other adult dependant
21·50
23·00


Increase for child
7·65
8·05







Existing weekly rate £
Proposed weekly rate £


Constant attendance allowance




Exceptional rate
46·80
50·00


Intermediate rate
35·10
37·50


Normal maximum
23·40
25·00


Half and quarter day
11·70
12·50


Comforts allowance




Higher rate
10·10
10·80


Lower rate
5·05
5·40


Mobility supplement
22·25
23·80


Allowance for lowered standard of occupation(maximum)
23·36
25·00


Exceptionally severe disablement allowance
23·40
25·00


Severe disablement occupational allowance
11·70
12·50


Clothing allowance (per annum)




Higher rate
79·00
85·00


Lower rate
50·00
54·00


Widows pension—Private's widow




Standard rate
46·55
49·80


Childless widow under 40
10·74
11·49


Rent allowance (maximum)
17·70
18·95


Age allowance for elderly widows




Age 65 to 69
5·00
5·35


Age 70 to 79
10·00
10·70


Age 80 and over
12·50
13·40


Family income supplement




Prescribed amount, family with one child
90·00



Child under 11

97·50


Child 11–15

98·50


Child 16 and over

99·50


Increase for each additional child
10·00



Child under 11

11·50


Child 11–15

12·50


Child 16 and over

13·50


Maximum amount payable, family with one child
23·00



Child under 11

25·00


Child 11–15

25·50


Child 16 and over

26·00


Increase for each additional child
2·00



Child under 11

2·00


Child 11–15

3·00


Child 16 and over

3·50


* An age addition of 25p per week is payable to retirement pensioners who are aged 80 or over.


†. Depending on area.

Mr. Michael Meacher: Is the right hon. Gentleman aware that the uprating of child benefit by less than one third of the rise in prices is targeting children as the first losers in his Green Paper cuts package? Is he aware that that decision will deprive 7 million mothers and 12 million children of £220 million during next year? Is he aware that that betrays the pledge solemnly given by his predecessor and restated frequently by Ministers that it is the Government's intention
to uprate child benefit each year to maintain its value." —[Official Report, 28 July 1980; Vol. 989, c. 1063.]

Is it not clear that the uprating was revealed today only because the Government had no choice? Otherwise, it would have been concealed like the rest of the cuts in the pipeline. Is this not a clear sign of the shape of things to come, and does it not reveal all too blatantly why the Government have refused to give the Green Paper figures—so that we could not know who the losers would be?
Is the right hon. Gentleman aware that surveys have shown that one third of all children now grow up in poverty or in low-income families? Does it not demonstrate the Government's scale of values that they would rather cut cash to children than tax perks to the rich? Is it not now clear that the Government have signalled further cuts in or freezing of child benefit when they say in paragraph 4.49 of the Green Paper that they will have regard to the need to concentrate resources on the area of family credit in determining the overall level of child benefit? Does that not mean that the Government intend to cut the value of child benefit even further?
Is the right hon. Gentleman aware that we welcome the restoration of the 5 per cent. abatement of the invalidity pension, while pointing out that it should not have been cut in the first place? When will the Government restore the cumulative loss to the long-term sick and disabled for the annual 5 per cent. shortfall over each of the past five years? Why is not the 5 per cent. abatement on maternity allowance and sickness benefit being restored at the same time? Why have the Government three years after the abolition of the earnings-related supplement, still not fulfilled the promise then given by the then Under-Secretary of State for Social Services, the hon. Member for Wallasey (Mrs. Chalker),
to improve maternity pay when the earnings-related supplement is no longer paid with the maternity allowance."—[Official Report, 14 May 1981; Vol. 4, c. 920.]
Is the right hon. Gentleman aware that one of the most significant points about his statement today is what it omits? It omits to give our 10 million pensioners any share in rising living standards. Is he aware that if Labour's policy of uprating pensions in line with either prices or earnings, whichever is the higher, had not been chopped by the incoming Tory Government, single pensioners would today have a pension £3·90 a week higher than today's uprating, and married pensioners would have a pension no less than £6·15 higher every week this year?
The statement is a cuts statement. It shows the path on all the issues other than those for which the Secretary of State is statutorily required to uprate by law which the Government intend to take over the next few years. It shows who the Government Will discard first. Even this Government cannot blame children for their dependence, yet they have started to whittle away the only income guaranteed to every child without fear or favour.

Mr. Fowler: That is one of the most ludicrous responses that I have heard even from the hon. Gentleman. We have announced today an extra £2 billion of spending. The effect is that the social security budget will now exceed £42 billion. That is one third of the total of public spending. Against that background, it is ludicrous to say that the Government are attacking social security.
The fact is that, in spite of all the problems of past years, we have maintained our commitment to those most in need and those in retirement. The fact is that the pensions increase, to which the hon. Gentleman referred, means that pensions have increased by 96 per cent. since November 1978, which is 10 percentage points ahead of


inflation. When the hon. Gentleman lectures us about our concern for the pensioners, let me remind him that it was his Government who presided over a 110 per cent. increase in inflation, which was devastatingly bad news for every pensioner.
The hon. Gentleman's major point was about child benefit. We are spending £2 billion in this uprating. We have had to decide the social priorities for that spending. The first priority must be to give help to families in greatest need. That is why we are giving a full uprating of one-parent benefit. That is why we are giving a full uprating of the children's scale rate on supplementary benefit as well. That is why we are giving more help to family income supplement families with older children. That is why we are giving more help through the housing benefit child needs allowance. The first aim is to direct help to the poorest. We have identified the poorest families as being one of the areas that we most want to help. That is precisely what we are doing.

Mr. Robert McCrindle: If, as many commentators predict, the rate of inflation in November, when these increases are paid, has fallen again below 7 per cent., will not that represent a small but welcome increase in the standard of living of the beneficiaries?

Mr. Fowler: That is precisely the point that I made in my statement. As my hon. Friend realises, inflation is now at 7 per cent. The forecast is about 5 per cent. for November-December this year. Had we kept to the forecast method of the Labour Government, the uprating would be less, and pensioners would receive £1 less in their pension than under this up rating.

Mr. Archy Kirkwood: Is the decision to cut back the increase in child benefit a one-off decision, or has the right hon. Gentleman taken the view that child benefit will continue to suffer in terms of indexation in the foreseeable future?

Mr. Fowler: Each year, and at each uprating, we have to decide what the social priorities for spending are. We have made it absolutely clear that the first aim, the first call on resources, is direct help for families whom we define as being in greatest need. However, we shall keep the issue under review.

Mrs. Edwina Currie: Does not my right hon. Friend feel even a little sorry for the Opposition spokesman, the hon. Member for Oldham, West (Mr. Meacher), who constantly uses the lurid language of Armageddon and attributes to the Government all sorts of nefarious motives and activities when the facts are just the opposite? Cannot we buy the hon. Gentleman a violin, and then it might sound a bit better? Does not today's uprating of £2 billion show that the Government keep their promises and will care for the most needy in our society?

Mr. Fowler: We do not want to attack the hon. Member for Oldham, West (Mr. Meacher) too much, because he might be moved unless we are very careful. What the uprating most certainly shows is that we are keeping our word and our pledges to the pensioners, and we shall continue to do so.

Mr. Jack Ashley: Is the Secretary of State aware that I welcome the increase in the vaccine damage payment? However, does he agree that it is no real substitute for a comprehensive compensation scheme, which is what the children merit and deserve?
Rather than feeling sorry for my hon. Friend the Member for Oldham, West (Mr. Meacher), will the right hon. Gentleman reflect on the fact that any increase must be more than 7 per cent. — the inflation rate—to be meaningful, and that any increase less than 7 per cent. would be a cut, which would be disgraceful?

Mr. Fowler: I do not accept the right hon. Gentleman's last point. As I have explained to the House, we have increased spending by more than £2 billion as a result of the uprating. The right hon. Gentleman will know that within a budget of more than £42 billion decisions must be taken.
I am grateful to the right hon. Gentleman for his comment on the vaccine damage payment, and realise that he would like us to go further. Nevertheless, I hope that he feels that we have taken a fairly giant step in the right direction.

Mr. Ian Lloyd: Whatever its merits against a wide range of criteria—and I do not dispute that there may be some—does not the announcement represent a massive transfer of real resources from the economically active to the economically inactive population? Do the Government accept that there is a limit to that transfer, and, if so, what is it?

Mr. Fowler: It seems to me and to the Government that we have a responsibility to care for and to provide resources for those in our country who are most in need. It is a responsibility that the Government will fulfil.

Mr. Frank Field: I thank the Secretary of State for his announcement of benefit increases. May I draw his attention to the part of his statement on which he did not dwell? Will he list those benefits and parts of benefits that have been cut? How many millions of claimants will be affected? What will be the total saving of public expenditure?

Mr. Fowler: The major changes concern child benefit, housing benefit and the central heating additions. The measures all told will reduce the increase in the social security bill by £85 million this year and £250 million in a full year.

Mr. Douglas Hogg: Does the fact that my right hon. Friend feels unable to uprate child benefit by the full 7 per cent. suggest either that wealthier people should pay tax on the benefit or that they should not receive it? If either of those policies were pursued, would not more resources be available to those in greatest need?

Mr. Fowler: Perhaps my hon. Friend will concede that we have sought to direct more resources to those families in greatest need through the family income supplement scheme. I am sure that my hon. Friend already knows that if we followed his advice on taxation of child benefit the result would be a reduction in the take-home pay of literally millions of people. That is a step about which we should think carefully before taking it.

Mr. Derek Foster (Bishop Auckland): Will the Secretary of State confirm that one of the most urgent priorities is families with children? Does he recall the


statement of former Secretaries of State and successive Ministers that one of the most effective ways of tackling family poverty is child benefit? How does he justify failing to uprate child benefit in line with inflation?

Mr. Fowler: For the reasons that I have just given, not only are we retaining child benefit as a universal benefit, but in the uprating we are providing a full uprating of one-parent benefit, children's scale rates on supplementary benefit and more help for families on family income supplement. That seems to me a sensible priority aimed at providing more help for low-income families.

Mr. Patrick Cormack: Does my right hon. Friend remember that when many of us were first elected to this House 15 years ago today the Conservative party was already committed to the abolition of the earnings rule? Can he now set a date for that abolition?

Mr. Fowler: I very much wish that I could, but I cannot at the moment. We have eased the earnings rule and we are entirely committed to abolishing it. We will continue to keep under review the exact date when that can take place.

Mr. Harry Ewing: Is the right hon. Gentleman aware that had the Government not abolished the earnings-related rule in relation to pensions, single pensioners would today be £3·90 and married couples over £6 a week better off? That means that under his stewardship pensioners are worse off than they would have been had the Conservatives not been in office.

Mr. Fowler: It would also have meant that contributions and tax would have had to be increased—[Interruption.] Either contributions and tax would have had to be increased or there would have had to be cuts elsewhere in the social security budget. It would have been a matter of choice. I should have thought it more sensible to keep to the policy that we are pursuing and to keep pensions in line with prices.

Mr. Michael Stern: Does my right hon. Friend agree that the only way in which this policy of keeping pensions rising faster than prices can continue in future is to abolish the impossible commitment to the SERPS scheme?

Mr. Fowler: To the extent that the emphasis in future should be on the basic pension rather than on the state earnings-related scheme, I agree with my hon. Friend.

Mr. Charles Kennedy: While the general uprating is to be welcomed, will the right hon. Gentleman agree that the comments made by him and the Minister for Social Security at Question Time begin to look rather cynical? Is it not evident that by not increasing child benefit to the rate at which it should be increased and by ploughing enhanced cash support into family income supplement — which the right hon. Gentleman spent Question Time discrediting because of its low level of take-up — this is a cost-cutting exercise which is not targeting in on family poverty?

Mr. Fowler: No, it is making use of the mechanism and structure that we have. We want to replace FIS by the new family credit scheme, but, clearly, that will take some time to achieve. Family income supplement is being increased, and that is one of the effects of what I have announced.

Sir William Clark: By all accounts, £42 billion spent on welfare in this country is rapidly approaching, if it has not passed, the maximum figure that the taxpayer can afford to pay. If it is Government policy, with which I agree, that the poor should be helped, why is not child benefit taxed in respect of the wealthy? Take-home pay will be reduced if child benefit is taxed, but that must be equitable if we wish to help the poorer people.

Mr. Fowler: My hon. Friend is right to say that we are spending an enormous amount on social security. About one third of all public spending is going on the social security budget. There is not much that I can add to what I said about child benefit. I know of no other country in western Europe which does not recognise—through the tax system or the benefit system, or both — the additional cost for all parents of having children. I regard that as a sensible policy and a sensible recognition.

Mr. James Lamond: If the budget is £40 billion when inflation is running at 7 per cent., surely that should be increased by £2·8 billion to keep up with inflation. Is the right hon. Gentleman aware, therefore, that £800 million more is required, in addition to the increase that he has announced? Does he appreciate, in other words, that his statement represents for many people a real cut in benefits of £800 million?

Mr. Fowler: The hon. Gentleman is allowing his conspiracy theory to run away with him. I have explained that there is a different benefit uprating and that it is 5·1 per cent. for supplementary benefit, and we must bear in mind the administrative costs of the system. I gave (Mr. Field) the figures, and I assure the hon. Member for Oldham, Central and Royton (Mr. Lamond) that there are no hidden cuts.

Mr. Nigel Forman: Is my right hon. Friend aware that many of us on the Conservative Benches warmly welcome the overall shape of his announcement and its components, notably the real price protection for the unemployed and pensioners? Will he bear in mind that when the change in child benefit was made it was part of the deal that, because it was a move from a system of tax allowances to one of child benefit, it should be available throughout the income scale?

Mr. Fowler: I entirely agree with my hon. Friend.

Mr. Dennis Skinner: Is the right hon. Gentleman aware that, if he really wants to help pensioners, those on supplementary benefit and others, the easiest way of doing so is to get more people back to work to reduce the £20 billion that is spent on financing the dole queue? If the right hon. Gentleman did that, he would really help the people who are suffering. If the right hon. Gentleman is so sure that he is doing the right thing, why are there now many more millions of people in poverty than when the Conservative party took office? Although the Tory press will applaud the right hon. Gentleman tomorrow, the truth is that he has tried to turn a pan of boiling water into a seven-course dinner, but we shall see through it.

Mr. Fowler: We look forward to the hon. Gentleman's offerings. The way to reduce unemployment is not to preside, as the last Labour Government did, over an inflation rate which went out of control because that—

Mr. Neil Kinnock: No.

Mr. Fowler: If the Leader of the Opposition does not agree, his credibility is even shakier than it was before.

Mr. Gordon Brown: Why is the Secretary of State implementing his social security review decisions with cuts in housing benefit, heating additions and the real value of child benefit? Does he recall the Prime Minister saying that raising the value of child benefit was evidence of the Government's commitment to the family? Does he recall his statement before the election that child benefit was the most cost-effective way of helping families with children? How many people will lose because of these decisions?

Mr. Fowler: I have already sought to set out the areas of loss with respect to child benefit, housing benefit and central heating additions and the amounts involved. I must point out to the hon. Gentleman, who continues to be sour on every conceivable point concerning supplementary benefit, that, by any standards, an uprating that costs more than £2 billion a year cannot be dismissed as the action of some mean-minded Government.

Mrs. Virginia Bottomley: Does my right hon. Friend agree that his decision that families on family income supplement should receive higher prescribed amounts for older children will make an enormous contribution to the working poor and will alleviate the poverty and unemployment traps prior to the introduction of family credit?

Mr. Fowler: It can certainly be seen as a step in that direction. One of the anomalies of the present position is that, although the child rate for supplementary benefit distinguishes between ages, that does not occur with respect to in-work credit. We have tried to move in that direction.

Dr. Oonagh McDonald: Will the right hon. Gentleman now admit that he was trying to mislead the House in his remarks about Labour and pensions upratings, as was shown in his reply to my hon. Friend the Member for Falkirk, East (Mr. Ewing)? Will the right hon. Gentleman now state clearly that, if the link between earnings and pensions had not been abolished by his Government, single pensioners would be better off by £3·90 a week and married pensioner couples by £6·15 a week? If the earnings link had applied, they would have received a similar uprating during the Conservative party's period in office. Will the right hon. Gentleman now admit that honestly and truthfully to the House?

Mr. Fowler: The hon. Lady has said absolutely nothing about how that will be afforded and how the resources will be gathered. To provide benefits of the size proposed by the hon. Lady, contributions and taxes would have to be increased, or she would have to cut elsewhere in the social security budget. If the hon. Lady wants an example of what the Labour Government did, she should look back to the mid-1970s when Mrs. Castle was Secretary of State for Social Services. She changed the uprating rules, operated on a forecast basis and saved more than £1 billion from pensioners.

Mr. J. F. Pawsey: Does my right hon. Friend accept that the £4 per week increase for pensioner couples will be widely accepted by both sides of the House as the action of a caring and compassionate

Government? Does my right hon. Friend accept, however, that some hon. Members believe that child benefit should be concentrated on those who are most in need?

Mr. Fowler: I do not have anything further to add on the question of child benefit. I am certain that the increase for pensioners, which we are announcing this afternoon, will be widely welcomed because it shows the Government's continuing commitment to pensioners.

Mr. George Foulkes: Why will not the Secretary of State confess that, even on pensions, he has not been generous? He has done only the absolute minimum required by law to keep up pensions with inflation. There has been no real increase. Will he admit that, because of cuts in housing benefit and heating assistance and his failure to increase the age allowance in line with inflation, many hundreds of thousands of pensioners will even have part of this increase clawed back.

Mr. Fowler: We have committed more than £2 billion of extra resources to social security. The bulk of those resources will go to pensioners. That is a fact, and it does the hon. Gentleman no credit to deny it.

Mr. Patrick Nicholls (Teignbridge): My right hon. Friend has been criticised for the fact that this Government abolished the earnings link with pensions. So that pensioners may assess what is on offer from the two parties, will my right hon. Friend remind the House that, in three of the five years when the earnings link existed, the Labour Government had to get out of it because they could not even honour their own legislation? When the then Labour Secretary of State for Social Services was criticised for not taking that factor into account, he said, "We had to take it into acccount; we did not have to get it right." What sort of cynicism is that? What prospect does that hold for the future of pensioners under a Labour Government?

Mr. Fowler: My hon. Friend is entirely right. We are content to be judged on our record with respect to pensioners and to let the public decide on that record.

Mr. William Cash: I congratulate my right hon. Friend on his statement and on the Green Paper, which represents a landmark in responsible government. Will he explain more precisely how he will protect widows? Will they receive the 7 per cent. increase that has been allowed for everyone else? He was not entirely specific on that point.

Mr. Fowler: Widows' benefits will increase by 7 per cent. in the normal way and will be fully uprated. I shall make a further announcement concerning widows in the speech that follows these exchanges.

Mr. Meacher: Will the right hon. Gentleman confirm that. the non-indexing of child benefit will cut about £220 million a year while the extra resources that he boasts of concentrating on children in families on family income supplement will amount to only about £5 million? Will he acknowledge that he misled the House a moment ago when he said that pensioners would have lost out under Labour's pension uprating formula? That formula included the earnings link, as a result of which after six years of Labour Government pensioners were 20 per cent. better off in real terms, which is far more than after six years of Tory government.

Mr. Fowler: The figure for which the hon. Gentleman is searching is not the one that he has cited. The net saving in child benefit in a full year is £175 million. If the Conservative Government had kept to the forecast method used by the last Labour Government, this uprating would have been less. The Labour Government—I think that the hon. Gentleman was a Minister in the Department at that time—changed the uprating formula to save money. In present terms, a Labour Government would be saving more than £1·25 billion in one of the most cynical moves ever perpetrated by any Government.

NORTHERN IRELAND AFFAIRS

Ordered,

That the proposal for a draft Gas (Northern Ireland) Order 1985, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee for its consideration.—[Mr. Donald Thompson.]

STATUTORY INSTRUMENTS, &c.

Ordered,

That the draft Education Support Grants (Amendment) Regulations 1985, be referred to a Standing Committee on Statutory Instruments, &c.— [Mr Donald Thompson.]

Ordered,

That the draft Weights and Measures Act 1963 (Various Foods) (Amendment) Order 1985, be referred to a Standing Committee on Statutory Instruments, &c. — [Mr. Donald Thompson.]

Crown Immunity (Removal from Workplaces)

Mr. Jack Ashley: I beg to move,
That leave be given to bring in a Bill to remove Crown immunity from premises covered by the Health and Safety at Work Act and the Food Hygiene Regulations; and for connected purposes.
Crown immunity is an out-dated anachronism that allows so-called Crown authorities to flout the food hygiene laws and the health and safety regulations and protects many institutions which cannot be sued in the criminal courts unless it is specifically provided for by legislation. But the Government rarely provide for that. The reason is that Crown immunity has nothing to do with the Crown. It enables the Government to evade our laws which they press other people to obey. That is unacceptable in principle and unjust in practice, especially regarding the food and hygiene laws and the health and safety regulations. A few minutes ago the Prime Minister said that the law was indivisible and should be obeyed. One can say amen to that, but the law is being evaded by the Government because they are hiding behind Crown immunity.
I am a Member sponsored by the General, Municipal, Boilermakers and Allied Trades Union. One of the national officers of that union, John Edmonds, has organised a survey of hospitals. Some of the evidence that he has uncovered about hospital kitchens is horrific. For example, in one hospital there are open gutters. Foul-smelling grids and electrical equipment with broken switches and no proper defence mechanism. People spray insecticide in the kitchen while food is being prepared. That is taking place in a very large south-west London hospital that is preparing food for hundreds of patients. One can only imagine what goes on. The hospital cannot be prosecuted because of Crown immunity. The union survey found that no fewer than 25 per cent. of hospital kitchens would face closure if there were no Crown immunity, so patients and the public are beginning to learn about the dreadful condition of many hospital kitchens.
The Department of Health and Social Security knew about this problem seven years ago. In 1977, the Institution of Environmental Health Officers said that nearly 1,000 hospital kitchens were below standard and that 100 of those hospital authorities merited prosecution—how is that for flaunting the law?—but they could not be prosecuted because of Crown immunity. The response of the Department of Health and Social Security was to send a polite circular to the health authorities inviting them to ask the environmental health officers to visit those hospitals and suggest that they should comply with the food and hygiene regulations.
In bureaucratic terms, the problem was resolved but in reality the problems were neglected, as the tragic events at the Stanley Royd psychiatric hospital in Wakefield have proved. It is not for me to pre-empt the inquiry at Wakefield, but the House should know that a former medical officer of health, giving evidence there, said that seven years ago he warned the health authority that the kitchen of that hospital was a culinary disaster area. Secondly, an environmental health officer has said that he would have prosecuted that health authority, because of


the conditions in the kitchens before the tragedy, if it had not been for Crown immunity. Without Crown immunity, therefore, that health authority would have been forced by the courts to act, and without Crown immunity 19 people who have died in that Wakefield psychiatric hospital might not have died.
Food poisoning there is not an isolated case. There have been recent outbreaks at Leicester, Cardiff and London. There are about 40 outbreaks of food poisoning every year in National Health Service hospitals. We can take no comfort from the attitude of certain health authorities. It may be remembered that when some cockroaches were found in a stew a few weeks ago one of the health officials said that it was all right; the cockroaches were sterile because they had been cooked.
The pest control group has said that many hospitals are infested with cockroaches. The Minister for Health should stop smiling and listen, because the hospitals for which he is responsible are in a shocking condition. He is responsible, he is negligent, and he is doing nothing about it.
The pest control group has said that the kitchens of the hospitals for which the Minister for Health is responsible are full of cockroaches and nothing is being done about it. The group has said that those vermin are causing disease—polio, hepatitis, gastro-enteritis and salmonella. The Minister should remember that salmonella killed 19 people in the Wakefield psychiatric hospital. What did the Minister do about the 19 people who lay dead because of negligence? Let there be fewer smiles on the Government Front Bench while I am introducing a Bill about a very important subject that affects people in hospitals.
My union is rightly concerned not only about patients but about people working in hospitals. It believes that hospital employees are very badly treated. I have no time to go into the details, but the hospitals cannot be prosecuted because of Crown immunity. Therefore, both patients and employees are at risk because the Government are hiding behind Crown immunity.
The Government defend Crown immunity by saying that the Crown cannot sue the Crown. That is legal mumbo-jumbo. That argument has been resolved in other countries and it can be resolved here. The principal argument is cash. If health authorities could be prosecuted, they would have to find the cash to clean up the hospitals and pay for improvements. If they had to pay for those improvements, there would be an end to this scandal of hospital patients dying through neglect. There would also be more protection for Health Service workers.
I hope that the House will sweep away the cloak of Crown immunity and provide proper protection for hospital patients.
Question put and agreed to.
Bill ordered to be brought in by Mr. Jack Ashley, Miss Betty Boothroyd, Mr. Robert C. Brown, Mr. Conal Gregory, Mr. Michael Meadowcroft and Mr. Gerald Kaufman.

CROWN IMMUNITY (REMOVAL FROM WORKPLACES)

Mr. Jack Ashley accordingly presented a Bill to remove Crown immunity from premises covered by the Health and Safety at Work Act and the Food Hygiene Regulations; and for connected purposes. And the same was read the First time; and ordered to be read a Second time upon Friday 5 July 1985 and to be printed. [Bill 161.]

Social Security (Reform)

The Secretary of State for Social Services (Mr. Norman Fowler): I beg to move,
That this House welcomes the Government's Green Paper, Reform of Social Security, Cmnd. 9517–9; and endorses the Government's aims of achieving a better social security system which would direct help to the people who need it most, make the benefit system simpler to understand and run, base pensions on a partnership between the state and individuals, and put social security on a sound basis which the country can afford.

Mr. Speaker: I should inform the House that I have selected the amendment in the name of the Leader of the Opposition. As no fewer than 32 right hon. and hon. Members have expressed interest in contributing to this important debate, I propose that speeches should be limited to 10 minutes between 6 pm and 8 pm, but I hope that those contributing later in the debate will also observe that limit.

Mr. Fowler: The central question in this debate is what changes should be made to social security to equip it for the role that it has today and to prepare it for the developments that are to take place in the next half century. Whatever differences there may be in the solutions suggested, very few people outside the House are arguing that nothing should be clone. The case for reform—the need for change—is overwhelming. In the Green Paper the Government have set out their plans for reform. These plans are based on an 18-month examination of the social security system—the most extensive examination for 40 years. In that time we received 4,500 separate submissions of evidence and held some 20 public sessions to take further evidence.
It is clear that social security suffers from a range of defects. It is too complex, with more than 30 different benefits, each with its own rules. Help does not always go where it is most needed despite the vast budget devoted to social security. There is also the totally unjustifiable position in which some people can find themselves worse off if they take a job than if they remain on benefit. The system is not properly equipped with computers to provide the best possible service to the public. The potential for co-operation between the social security and tax systems is not being achieved.
The whole system cries out for reform. That is why the Government are tackling the matter. Of course, there are those who argue that it is all so immensely difficult that Governments should avoid the challenge, but I do not believe that such an attitude is justifiable. Fundamental problems exist today and other emerging problems, such as the future cost of the social security budget, will affect not only our children but many contributors today. Any Government worthy of the name must face those issues. To do otherwise would be an abdication of responsibility.
There is also a responsibility on any other party which has any pretensions to form a Government to set out its policies. In the debate in the coming months we shall want to know just where the Labour party and indeed the other parties stand on their own policies—not just what they are against, but what they are for.
We should not forget that the Labour party has been conducting its own review of social security. According to The Observer of 14 April, the review undertaken by the hon. Member for Oldham, West (Mr. Meacher) was

intended to pre-empt the Government's Green Paper and was seen by his colleagues as an election winner. On 15 April the hon. Gentleman published his proposals. They involved scrapping mortgage tax relief, scrapping the married man's tax allowance, which would bring about 1 million people back into tax, and spending a further £15 billion. Clearly, not all the hon. Gentleman's colleagues regard him as a natural election winner, but the fundamental point remains that we are still waiting for the Labour party's full report.

Mr. Michael Meacher: The right hon. Gentleman has not published the figures.

Mr. Fowler: We have published several volumes of our report. When the hon. Gentleman published the first two chapters of his report he said that the full proposals would be published shortly by Spokesman Books. I hope that nothing nasty has happened to them at the printers.
It is just not good enough for the Opposition, not only to avoid setting out their own policies, but to duck the real debate on the structure of the system on the basis of a bogus argument about figures. The Government have made it clear—and I make it clear again today—that we shall set out a range of illustrative figures with the White Paper in the autumn. The purpose of the Green Paper is to get discussion of the structure and the principles of reform. I hope that by the time we put forward our range of figures the Leader of the Opposition will have put forward not just illustrative figures but some illustrative policies on behalf of the Labour party.

Mr. Gordon Brown: rose—

Mr. Fowler: Perhaps I may continue.
The central purpose of the Green Paper is to focus discussion on the structure of social security that we want for the next 30, 40 or 50 years. Nowhere is that more important than in the context of pensions. I hope that one point, at least, will be accepted by the House—that the projections have changed since the estimates published before the introduction of the legislation which set up the state earnings-related pension scheme. The 1974 White Paper published by the Labour Government appears to have assumed that the number of retirement pensioners would rise from 8·2 million in 1975–76 to about 9·5 million in the years 2010. No prediction of the number of pensioners was provided beyond that year. In fact, there are already not 8·2 million, but 9·3 million, people receiving retirement pensions. Moreover, evidence is now available which was not available at that time — in particular, the results of the 1981 census, which did not become available until 1984.
As a consequence of the census figures, the Government Actuary has increased his estimate of the number of pensioners in 2010 by 1 million—that is, 1 million more than expected in 1974. Beyond that, the best estimates available to us show that there will be a further 2·5 million pensioners by 2035. The peak number of pensioners will therefore be up to 3·5 million more than was publicly acknowledged in 1974 and 4 million more than we have today. At the same time, the ratio of contributors to pensioners worsens. The assumptions on which the SERPS scheme is based have thus been overtaken not only on population projections but on the other central assumption of 2·5 per cent. unemployment and a certain 3 per cent. annual growth.

Mr. Robin Corbett: rose—

Mr. Fowler: Perhaps I may continue.
It is important that the Opposition should understand the thesis on which this is based. The result in terms of cost is basically this. There are now 9·3 million pensioners in this country. Providing pensions currently costs £15·4 billion, excluding the extra £1 billion of pensions spending that I have announced today.
In 50 years' time there will be 13·2 million pensioners. Providing basic pensions for them will cost between £22 billion and £43 billion a year at today's prices, depending on the basis of uprating—whether it is by prices or by earnings. On top of that, the state earnings-related pension scheme will add £23 billion a year. That is not significantly dependent upon the basis of the uprating. It is inflexibly fixed by the rules of the scheme and the promises which we are now making to ourselves about what our children should pay. In short, we face a pensions bill which will at least treble in real terms if we do not act now.
I do not believe that this evidence can be ignored or simply swept under the carpet. At some stage those issues will have to be faced. The real question is not whether anything should be done, but what should be done. That, of course, is not just my view, or just the Government's view; it is a view supported by a range of other organisations.

Mr. Brynmor John: What is the change since 20 May 1983 and what new figures have become available since then, when the Government fought the last election on a pledge to keep SERPS as it was?

Mr. Fowler: The census figures which came through in 1984 revealed that there would be 1 million extra pensioners, not by 2035, but by 2010. The hon. Gentleman has great experience in this area. On the best evidence available to the Government—which would be available to any Government — the increase in the number of pensioners between now and 2035 will be 3·5 million to 4 million.
It is not just the Government who are setting out this case. It has been made by organisations such as the Institute for Fiscal Studies, which, referring to SERPS, said:
It is difficult to discuss the future of social security rationally in the shadow of this foolish commitment.
One has to consider the views of the political parties. The Liberal party has never agreed with the introduction of SERFS. Indeed, in April, Lord Banks, the Liberal party's spokesman in the other place, wrote to The Daily Telegraph to point out that he and his party had
consistently opposed the introduction of SERPS".
For the Social Democratic party, Mr. Dick Taverne, the party's social security expert, was entirely unequivocal. Speaking on Channel 4 in February, he said:
The state earnings-related pension scheme is something which we won't be able to afford in the long run, so we should scrap it now before too many rights are acquired.
I concede—if that is the right word—that the leader of the SDP has changed the emphasis from that admirably clear statement of policy. As I understand his position now, it is not that SERPS should be left unaltered. He believes that, rather than a replacement, a restricted SERPS might be a better answer.
That is an option which we looked at in the review and which we discuss in the Green Paper. It is an option which one of the outside advisers on the review, Mr. Lyon, has made it plain he would prefer. I was surprised to hear the right hon. Gentleman the Leader of the Opposition quoting

Mr. Lyon's views with such reverence last week, for basically what restricting SERPS means is that contributions to the state scheme remain the same while benefits are reduced.
Whatever is done to restrict SERPS simply cuts the benefits without putting anything in their place. That will still leave the two nations in pensions—one nation with its own occupational pension and the other nation without. Frankly, I do not believe—and I am content that the leader of the SDP should pursue that point—that Mr. Lyon's proposals have much attraction, either economic or human.

Mr. Jeff Rooker: Is it not the case that the Government said in 1981, on the first quinquennial review of the state earnings-related pension scheme, that changing from the relationship of prices to earnings, to prices only, would undermine SERPS? Was that not the reason why the Secretary of State said before the review even started, in November 1983, that to set up the inquiry was not to call into question the fundamental pension structure which had been established with all-party support and to which he was himself a party? Finding another one million people is one thing; calling into question the fundamental structure is a totally different matter. Why has the Secretary of State overturned the promise which he gave when he set up the review in the first place?

Mr. Fowler: For the very good reason—and it is for the House and for the parties to decide on the merits of the investigation—

Mr. Roy Hattersley: And the public.

Mr. Fowler: I accept that, and I am prepared to debate this matter anywhere with the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).
All the evidence that has become available to us in the course of this review has led me and the Government to question whether SERFS is an obligation. That was the purpose of the review. There is no point in having a review of this kind unless one is prepared to look at the options and at the evidence. One of the most depressing things about this is that Opposition Members call for the figures, but when the figures are produced, they take no notice of them.

Mr. Meacher: The Secretary of State speaks with much confidence about these population projections. How does he reconcile this with his own speech, when he said:
the population forecasts are uncertain; they need to be treated with some caution.
I am glad to see the right hon. Gentleman nodding. He went on to say that now that it was policy to uprate pensions in line with prices rather than earnings
it would be difficult to argue that we are unloading an intolerable burden on future generations.
Furthermore, why did the Green Paper include the worker-pensioner ratio only to the year 2035, when it is at its lowest point, and not include that same ratio at the year 2050 — figures which were available to the Government — which shows that the figure is considerably better?

Mr. Fowler: It seems to me that, not untypically, the hon. Gentleman has just shot himself in the foot. He questions my forecasts up to 2035, he says that those are uncertain, and then he wants me to produce forecasts to


2050. The hon. Gentleman has only to look at the Green Paper, in which we have not only set it out up to 2035, but, in the third volume, if I remember correctly, have shown an ultimate position for the number of pensioners. The point which the hon. Gentleman is seeking to make is that 2035 represents a peak of pensioners and a trough of workers, but it is a peak which has to be afforded and sustained. However the hon. Gentleman does his sums—God knows he does them in some peculiar ways at times—over the next 40 or 50 years we shall have between 3 million and 4 million extra pensioners. As social security spokesman for the Labour party, the hon. Gentleman has to face that fact. If he wants to argue that nothing can be changed, that is up to him, but we must argue on some factual basis.

Sir David Price: Will my right hon. Friend point out to the hon. Member for Oldham, West (Mr. Meacher) that the figures depend upon an improvement in the birth rate, and that if the decline of the past 30 years is not reversed the ratio between pensioner and contributor in 2010 will be a good deal worse than the figures in the table?

Mr. Fowler: Yes, and the ratio between contributors and pensioners depends also upon a substantial improvement in employment. The hon. Member for Oldham, West will find it difficult to sustain the case that we are taking an unduly pessimistic view of the future.
The Government's approach is to begin now to face the long-term problems, and to do so constructively. The problem of SERPS is a problem for the next century and we have put forward proposals which will have their effect in the next century. We do not intend to change the position of any existing pensioner or anybody retiring this century. The time scale of pensions, I fully accept, is too long to make changes suddenly, but by beginning now to increase occupational and personal pension cover we will achieve a position where everybody is building up his own pension through his job.
In short, we are proposing, first, that the basic state pension will continue, and will continue to be protected against inflation; secondly, that the state earnings-related scheme will continue for everyone nearing retirement so that no one who retires for the rest of this century will be affected; and, thirdly, that men in their 40s and women between 35 and 45 will be given a special extra entitlement of rights which will be added to their pension.
In other words, the Government are facing the major problems and the major issues now, while at the same time giving everyone the right of an occupational pension or a personal pension with his job. These proposals should be added to the measures which we are already taking to improve the rights of early leavers from occupational pension schemes and to establish transfer rights so that there should be no obstacle to mobility.

Mr. Anthony Nelson: Many people will agree with my right hon. Friend's proposal for changing the structure that deals with an actuarial probability of the liability in the future, but we are still left with the problem of having to pay for the substantial cost of the basic state pension and the new proposals for portable pensions. With the new figures, about which we know, of substantially more elderly people, this will, predictably enough, leave an enormous burden which has to be met out of total expenditure. Is there not a case for saying something about

grasping the real nettle, which is whether we are prepared, and can afford, in future years annually to index and uprate these substantial benefits?

Mr. Fowler: I shall listen to what my hon. Friend says on that. The sensible way to approach this problem—we are agreed that a problem exists — is to put one's emphasis on the basic state pension. The Government are committed to increasing the basic state pension in line with the rise in prices, which is a sensible social and economic priority. At the same time, we want to move to a situation where virtually everyone in a job is building up a pension at the same time. In other words, we want to keep the advantage of personal pensions, but also have the flexibility which a pay-as-you-go system gives as well.
One of the fundamental mistakes in the debate on the pensions scheme is that there is a belief that the national insurance pension and SERPS will be paid from a fund. It will not be paid from a fund, because there is not one. We are seeking to put obligations upon future generations of contributors. The Government are trying to tackle that problem. Strengthening individual provision is only one of the Government's objectives. We also recognise the vital role of our social security system in supporting those in need. Our aim is to develop the system of help for those on low incomes so that it is simpler, easier to understand and administer and fairer in providing help to all those who need it.
The shortcomings of supplementary benefit, for instance, are well established. The endless rules and detailed guidance on their interpretation inevitably lead to inaccuracy and frustration for claimants and staff alike. All too often the present system is also ineffective in achieving its aims. The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) asked me about the family income supplement in a question on my earlier statement. It is based on a one-child family, it gives only small additional increases in benefit to those with more children, and it takes no account of the children's ages. Because its structure is to different from supplementary benefit, many families especially larger families and those with children—can find themselves worse off than if they were out of work. That position cannot be supported.
Family income supplement, like housing benefit, is also paid on the basis of gross income. This ignores the 40p in the pound deductions for tax and national insurance which many people in receipt of these benefits still face. The result is that, in some cases, the cumulative loss of benefit is so large as to more than wipe out any increase in take-home pay. The proposals which the Government have now put forward will tackle those problems at their roots.
For the first time ever in this country, a Government have attempted to deal comprehensively with the needs of all low-income families. Up to now, income-related support has always been provided in a piecemeal fashion and different benefits have been cobbled together at different times to meet different problems. They have never been brought together within a single consistent framework.
The new family credit scheme is at the heart of the Government's approach to income-related benefits. It is based on the belief that there should be an effective bridge for low-income working families between the full support provided for children of those who are out of work and the level of universal assistance through child benefit.
Family credit will provide that bridge. It will be based on the same structure as the new income support scheme, with extra help for older children and larger families, to help ensure that families cannot be worse off in than out of work. It will be assessed against pay after tax so that families cannot find benefit being withdrawn faster than their take-home pay increases. It will be paid by employers through the pay packet, so that it acts as an offset to tax and national insurance.
I believe that this method of payment will represent a significant narrowing of the gap between the tax and benefit system. Indeed, once the computerisation of the systems has been completed, it may become possible to use the same system for assessment as well as for payment. I also believe that payment through the wage packet will help to ensure that the benefit is taken up by more of those for whom it is intended.
Our proposals for a new income support scheme, backed by the social fund, will also be a major step forward. The new scheme will do much to end the intrusive personal questioning to which so many supplementary benefit claimants presently have to submit. Our system will be simpler. It will use the same resources—I emphasise that—in a better way to help those who are most in need.
Today, for example, additional assistance for heating and laundry is provided through individually assessed payments. The new scheme will build in the additional help automatically for those groups who are most likely to need it.
There is no question of just scrapping the additional requirements payments and of putting nothing in their place. We would be replacing a complex system, where help goes only to certain individuals after a process of assessment, by a simpler system in which entitlement will be clear and automatic. It would be a matter of taking the available resources and applying them so that they are shared equally and as of right by those groups whose needs are likely to be the greatest.
It is the social fund which will have the task of dealing with the genuinely exceptional circumstances and problems which inevitably arise. This goes much wider than the question of single payments under the existing supplementary benefit scheme. The purpose of the social fund will be to provide help much more flexibly and sensitively in a wider range of circumstances. We will be training staff specially to approach problems from a perspective which takes account of the whole range of an individual's problems. There will, of course, continue to be financial crises which have to be met.
More generally, we would expect the social fund to help people in response to their real needs. This will involve providing loans to those on income support to cope with the cost of unusually large purchases. It will also involve providing extra help with funeral costs and the new larger maternity grants. We will also be looking to develop the role of the social fund as a more active partner, with the health and social services authorities, and with the voluntary sector, in finding the right mix of cash and care to meet the needs of the elderly and other priority groups.

Dr. David Owen: Will the Secretary of State accept that if the social fund is to win acceptance it cannot be cash limited, and that it must be able to reflect need?

Mr. Fowler: I accept that it must be able to establish that it is meeting need. I do not accept that it cannot operate within a budget in much the same way as many other areas in the social field operate. What I say to the right hon. Gentleman, who has had experience in the DHSS, is that there is no dignity in the present single payments system. Whatever criticisms may be levelled now at the social fund, I think that very few people would want to perpetuate the present system.

Mr. Frank Field: I think that the Secretary of State's statement on family credit is the most significant that he has made on the Green Paper. He said that it would result in a significant narrowing of the gap between benefit and wage levels. How can he give that assurance to the House if he has not worked out his new scheme with figures? If he has, may we have the figures?

Mr. Fowler: For the very good reason that the movement to net pay is the most significant movement and the most significant policy development in the whole Green Paper. That is set out in the Green Paper, as the hon. Gentleman knows.

Mr. Neil Kinnock: We shall have more of the family credit system later. In the meantime, is the Secretary of State giving us a guarantee that, notwithstanding the fact that it will be cash-limited, the social fund cannot run out and that, if there is in any year a large number of claims on that fund, it will be extended?

Mr. Fowler: I said that we believe that the social fund can operate within a budget in the same way as, in the Health Service, for example, the hospital service works within a budget and the health authorities work within a budget. What we are trying to do here is to improve the position, and clearly we will be guided by the experience that we have in the operation of that fund. The right hon. Gentleman knows perfectly well—if he does not know, he should know — that the present position is indefensible. The present position, which has existed not just under this Government and not just under the previous Government, but since the 1940s, is indefensible.
The new role for social security will take time to develop, but, as with our aim of improving co-operation between the tax and benefit systems, we are anxious to see those parts of the welfare state which provide help to those in need work more closely and effectively together.
The final part of the new co-ordinated system of income-related benefits will be a much simpler housing benefit scheme. As with family credit, it will be assessed on the basis of net, not gross, income and will be based on the same broad structure as income support. This will mean that those on equivalent incomes will get equivalent help with their housing costs whether they are in or out of work—and that help will extend to 100 per cent. of rent for the poorest groups. As I have made clear, we are seeking to check—and. I am being entirely frank—the amount of money going on housing benefit, for the good reason that one third of all households are receiving help with their housing costs, and help with domestic rates can extend to people well up the income scale.
We have therefore proposed to set a maximum limit on the help which can be given with rates. Much will


obviously depend upon the outcome of the Government's review of local government finance, but the principle that everybody should make at least some contribution to the cost of local services is one which the Government believe to be right.
I should just like to clear up one point on which some misunderstanding has arisen. Our plan for the restructuring of widows' benefits was based on the objective of giving greater help to widows at the time when they need it most — that is at the time of bereavement. We intend to replace the present widow's allowance by a sum of £1,000 payable at the time of bereavement. This will be in addition to the continuing benefits payable to widows with children and older widows.
I can tell the House that the lump sum payable to all widows will be entirely tax-free, unlike the existing widow's allowance which it will replace.
The Green Paper is intended to carry forward the debate about the sort of social security system which we want in this country. It is a fundamentally important debate. It is a debate about principles, structures and policies. In that debate, the Government's position is clear. We want a simpler system—one which gives better service to the public and directs help most to those most in need. We want a system which is soundly based—now and for the future —and we have set out in the Green Paper our proposals for achieving those ends.
The responsibility to set out policies is not just on us alone. What has been lacking from the debate so far is any clear statement of the policies and principles which the Opposition Parties wish to put forward. Therefore, we look forward to hearing today from the right hon. Gentleman the Leader of the Opposition what his policies are. We welcome also the opportunity that he has to set out the position; for example, whether he endorses the £15 billion spending programme of the hon. Member for Oldham, West, and what his plans are for changing mortgage tax relief. Will he tell us whether he intends to abolish the upper earnings limit for employees? Will he tell us whether his pledge to retain the state earnings-related pension scheme is also a pledge to reintroduce contracting out, or will he instead be looking to put into effect the Labour party's plans for Government direction of pension funds investment? I say to the right hon. Gentleman seriously that those are the questions to which the public and the House will want to know the answers.
The Government's aims are clear. We are seeking a new partnership in social security. We are setting provision by the individual alongside provision by the state. We are looking for a simpler system which is fairer between those in and out of work and which directs more help more effectively to those who need it most. Above all, we are looking for a modern and better managed social security system which is adjusted to the needs of today and able to meet the challenges of the future.

Mr. Neil Kinnock: I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
'whilst seeking to achieve a more just and efficient system of provision and contribution for social security, strongly condemns the proposals made in the Government's Green Paper, Reform of Social Security, which would, if implemented, destroy many of the established and widely supported principles of care for the needy in Britain, bring about substantial reductions in income, security and, therefore, freedom for pensioners, mothers,

widows, low income and pensioner home owners and low paid and unemployed families, result in increased means-testing for the poor in order to produce savings in resources for the rich, and force the great majority of workers to pay higher contributions for pensions without providing for the needs of the disabled; and rejects as fraudulent the Government's claim to be undertaking consultations when they refuse to provide proper estimates of payments and contributions resulting from proposals for major and retrograde change which they have never put to the electorate '
We have just been treated to the extraordinary spectacle of a Secretary of State in a Government with a huge majority in their second period of office, and with major proposals to put to the House, concentrating much of his speech not upon a defence of his Green Paper but on a series of questions addressed to the next Government. That is a confession of a massive weakness in the Government case, and we look forward to hearing more of that from the Secretary of State. Before we go any further, I should tell the right hon. Gentleman that when the Labour party puts its proposals before the House and the country before and after the next general election, there are two things that we shall not do. I shall not write to right hon. and hon. Members saying, as the Prime Minister did on 20 May 1983,
nor are there any proposals to change the system.
Nor will I permit my Secretary of State for Social Security to give any undertaking — [Interruption.] I know that this embarrasses the Secretary of State greatly. I will not permit my Secretary of State to give any undertakings that, if he should set up any inquiry, it will not call into question the fundamental pension structure that was established by the Social Security Act 1975, to which he was a party. He ratted on that, and he has been twisting all afternoon. It is about par for the course.
The Green Paper on the reform of the social security system calls itself the "most major fundamental" review of the welfare state since William Beveridge's report on social insurance and allied services in 1942. With such a monumental project in hand, it is a shame that we could not depend upon the Prime Minister to present it to the House. I am glad, together with my right hon. and hon. Friends, to demonstrate the great importance that the Labour party attaches to this destructive set of proposals. The Prime Minister is using the Secretary of State as a figleaf, and never was there such an emaciated figleaf.
This fundamental review—the biggest for 43 years, as the Government repeatedly tell us—was never put before the electorate for their assessment. The independent experts recruited to assist in its compilation are deserting the Prime Minister even faster than she is disowning them. If the review is a set of reforms with the benevolent purpose of improving and clarifying the social security system, Sweeney Todd was a medical researcher and the blitz was an exercise in town planning.
The Government tell us that their review and the changes proposed by it have five objectives: resolving the financial issues of future pensions provision; directing resources effectively; clarifying the social security system for claimants; simplifying the administration of the system; and promoting personal independence. At face value, those are noble aspirations, decent intentions and worthy objectives, and we could all support them. But, Mr. Deputy Speaker, by their deeds shall ye know them.
The deeds of the Government stretch like a guilty list through the past six years. Those deeds have resulted in a cut in social security for the disabled, the poor and the unemployed of £9,000 million, at the śame time as the


Government have made awards averaging £2,000 million a year to the richest 5 per cent. in society. Those deeds include a change in the formula for calculating old-age pensions, which means that a pensioner couple are £4 a week worse off than they would have been had the Government sustained the earnings pension link. Those deeds include the removal of housing support, which has increased rents by a record 165 per cent. during the past six years. They include the denial of board and lodging allowances to youngsters, which has turned thousands of them into travelling paupers.

Mr. Roland Boyes: Does my right hon. Friend agree that the Government's proposals will subject jobless and homeless under-26-year-olds to a range of economic, social and psychological pressures with which some of them will be unable to cope, leading to some of them taking up crime, drugs and other symptoms of despair?

Mr. Kinnock: I am sorry to have to say it, but my hon. Friend is right. Many reports have already been received to show that that sort of thing is happening — [Laughter.] I hope that the constituents of the hon. Member for Bexhill and Battle (Mr. Wardle) have noted his amusement about the position of many thousands of young unemployed people. Yesterday, I heard of the case of a constituent of my hon. Friend the Member for Livingston (Mr. Cook). A young man who went to Edinburgh in search of work was living on the board and lodging allowance, but was later denied that allowance, so that his income was cut from more than £60 a week to just over £20 a week. The allowance ended on 30 May. He was ejected from his lodgings a week later, and two days later, a young man with no history of instability or suicide attempts, committed suicide. I hope that the hon. Gentleman is still laughing.
I do not say that the consequence for every young person, or for most youngsters, will be to fall into such despair and difficulty. I am saying that a completely unjust system has been inflicted upon those youngsters. That is part of the record of this Government, by whose deeds we know them. Therefore when they protest that they wish to tidy up the welfare state and make it coherent and more direct in its application to needs, I say, "Rubbish." I also say that it is hypocritical rubbish from the Secretary aof State and his hon. Friends.

Mr. Eric Forth: Does the right hon. Gentleman agree that a great problem caused by the complexity of the present system is the low take-up rate, whereby many people in real need do not obtain benefits that they deserve? Does he agree that the new proposal, which involves a simplification of the process, must lead to higher take-up rates and to real benefit for those in need?

Mr. Kinnock: Although I applaud the hon. Gentleman's motives, I must tell him that he does not understand the scheme. How can the take-up rate for housing benefit be increased, when the scheme will deny such benefit to 7 million people who presently receive it? The same system of application to the DHSS applies to the family credit scheme as it does to the family income supplement. How will there be an increase in take-up

there? If the hon. Gentleman's aspiration is to increase take-up rates, he will be a sadder and wiser man when he investigates the matter. I hope that, after he has considered the proposals properly, he will vote with the Opposition tonight.
Hardly anyone, except perhaps for the more gullible Conservative Back-Bench Members, believes that the Government are innocent of malice or that they have decent intentions with regard to this measure. Not even the Government believe it. They know that the proposals are not for the reform of the welfare state, but for a raid on the welfare of millions of poor people and pensioners. They know that it is not a shake-up of the benefits system, but a shake-out of the most needy and some of the poorest people in society. That is why they are so coy about giving the figures that will enable a proper assessment to be made, not just of the structure but of the practical implications for those who will be at the sharp end of the proposed changes.
The Green Paper is for consultation and public debate, but no participant in the debate and no one who will feel the results of the proposals is entitled to see the figures. The Government are asking all of us in the House and elsewhere to judge a monumental proposal for a huge structural change—as they say—with hardly any costing of the components of the various schemes and without saying who will gain or lose by the changes, or what they will gain or lose. It is not so much a review as a riddle.

Mr. Patrick Nicholls: Given the concern of the right hon. Gentleman with figures, does that mean that he will be telling the House by how much a Labour Government would increase taxation so as to maintain services, bearing in mind the cost to the Exchequer? If he intends to criticise us for our lack of figures, how much does he intend to raise tax to restore SERPS?

Mr. Kinnock: I am coming to that. In the meantime I hope that the hon. Gentleman will cogitate on why in 1975 his party entirely supported SERPS, why it fought two elections supporting it, and why the Secretary of State said that it was not his intention to change that scheme. Those are the questions that have to be answered. It is the Green Paper bearing the name of the Conservative Secretary of State currently in office that we are debating, and not a Green Paper, White Paper, Queen's Speech or any other proposal from the next Government. At that time, if the hon. Gentleman survives the next general election, I shall be glad to respond to his inquiries.
The excuses for changing the figures have moved with astonishing speed over the past fortnight. On 4 June, when I asked the Prime Minister for dependable estimates, she told me that in accordance with custom we would have to wait for the May retail price index figures. When on 6 June I asked for a reliable indication, the Prime Minister wrote to tell me that we could not have the figures for two years because they would have a spurious precision and might be actively misleading. By last Thursday, 13 June, much had changed. The Prime Minister told us then that they would provide a range of illustrative figures when the White Paper was published in the autumn. It was all very matter-of-fact. Indeed, the Prime Minister was almost eager.
The hon. Member for Suffolk, Coastal (Mr. Gummer), who in addition to his job as Paymaster General is


currently temping as chairman of the Conservative party, went even further. On a radio programme last Friday he was so matter-of-fact that he said the figures were always to be in the White Paper. Yet for nearly a fortnight previously the Prime Minister had been resisting all efforts to get her to acknowledge that.
We know that the Government have the information; we know that the DHSS has the information; we know that even the printers have the information. The only people who cannot have it are the House of Commons and the British public who have to deal with the proposals. When we know that the Government have the information and will not give it to us, we can reach only one conclusion —that to publish now would be bad politically for the Prime Minister and for her Government; therefore, the figures have to be studied by the Government's statistical beauty consultants so that, with the advantage of the passage of time and two upratings in pensions and benefits within eight months, they can start to become politically presentable. That is why the Government will not come clean.
Of course, if I may coin a phrase, we are given a lot of fudge and mudge about the figures not being available. Would 'it not be extraordinary if, after all the wrangling and toing and froing of Her Majesty's Government, the Cabinet and the Cabinet committees, there were still no figures available?

Mr. Tim Eggar: In the Green Paper it is stated clearly that the Government estimate that the cost of provision for pensions will quadruple by the year 2033. Does the right hon. Gentleman accept that figure and, if so, how would he finance it?

Mr. Kinnock: I shall come to that in a moment if the hon. Gentleman will bear with me.[Interruption.] I insist on making my own speech. The Secretary of State need have no fear; I shall deal with the matter in detail and with delight. Meanwhile, he can give further attention to inventing excuses as to why — proud as he is of his proposals—he still will not give the figures upon which they are based and how many gainers and losers there will be. This makes the right hon. Gentleman restless but I intend to keep on saying it because that is what the people want to know, and they are right to want to know.
The deviousness and the reluctance of the Government to publish figures extend to the review itself. They used William Beveridge as an alibi. On the second page of the Green Paper they quote from paragraph 9 of Beveridge's report in 1942:
The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.
We all say amen to that. There can scarcely be a right hon. or hon. Member who would not agree with every word of that aspiration.
What the Government do not add is that when William Beveridge wrote that he argued that a genuine system of social security went beyond benefit and pension payments and involved full employment, a free National Health Service and decent housing available to all. When he wrote that in 1942 he was trying to organise the conquest of want, idleness and poverty; eventually he got the consent of all parties in the House of Commons.
No such motive inspires this Government. On the contrary, they are the Government of mass unemployment, not full employment, the Government of cuts and charges in the National Health Service, not of a free National Health Service, and the Government who have presided over the biggest rise in rents, rates and mortgage payments and the lowest number of building starts in the whole of modern history. That is the difference between Beveridge and Fowler. They should not try to perpetrate such a confidence trick on the British people as to quote in aid William Beveridge with his different aims. They cannot use that alibi.
Wherever it is examined, the Green Paper demonstrates that the Government do not have the purpose, the tenacity or the humanity of Beveridge or of anyone who has come since. That is evident from the proposed abolition of the state earnings-related pension scheme. The Government have convinced themselves that in the second quarter of the 21st century the nation will not be able to afford SERPS. The Government's own Social Security Advisory Committee does not think that. It says that there are no firm grounds for coming to that conclusion. That advisory committee is right, because the Government's assumptions, built into their excuse for abolition, are the most perversely pessimistic that can be made.
For instance, the Government assume in their figures that real pay will rise by only 1·5 per cent. per annum on average over the next 50 years, when over the last 40 years it has risen by an average 2 per cent. The Government assume in the figures that they offer us that the basic pension will rise in line with earnings. That might be good news. Are they planning to do that five years after abolishing the link and causing so many problems for pensioner couples? They go on to try to argue both ways because in regard to the future they say that the cost would be unsupportable, but they neglect the record of the past.
The Government say that we cannot afford a 2 per cent. rise in pension contributions over the next 50 years but they neglect the fact that during the past six years the Government have sponsored an increase of 2·5 per cent. in those contributions. Why can we not sustain that level of contribution over 50 years when we have—because of the Government's policies—sustained a greater level of contributions for the past six years?
The Government assume in their figures that the work participation rate will remain constant over the next 50 years. In the past 40 years it has risen by 4·5 per cent. They assume that the number of pensioners will rise. At last, they are right, but they also assume that the economic growth rate will fall. That will occur only if we have a succession of Governments over the next 50 years who are as ruinous as this Government have been.

Dr. Alan Glyn: Does the right hon. Gentleman think that Beveridge realised what the proportion of the working population to the retired population would be? Did he have any idea that the percentage would be so great?

Mr. Kinnock: We can discover Beveridge's figures. I can meanwhile talk about 1985 and the attitude that is consistent with William Beveridge's philosophy. In 50 years' time three workers will be getting the equivalent of six workers' incomes now. Every three workers will earn twice in real terms what is being earned now. Even on the Government's assumptions, that will be "the equivalent of


double what is being earned now. Nobody says that no problems will arise from that, but that does not make it impossible to sustain a proper pension scheme for retired people.
The Government are pessimistic. They have failed to take into account changes in the economy, the increasingly intensive capitalisation of the economy and the higher production which will occur as soon as they are out of office. They assume next to nil growth over the next 50 years. If that were to be the case, we would be worried about pensions, but that worry would be subsumed in our immense anxiety that the country was going out of business. The Government make all those assumptions and come to the conclusion that we cannot afford SERPS. Even if their calculations were correct, their reactions to the calculations would still be wrong. If the nation will have difficulty paying its retired people a decent pension, the situation will be made worse by abolishing SERPS, which is the fairest, most efficient and cost-effective of the pension schemes in the present system.
As a result of the abolition of SERPS, everyone will pay more for their pensions than they pay at present. That is made clear in one of the few facts that is offered to us in the Green Paper. Some 11 million people contracted into SERPS pay 19·4 per cent. in national insurance and pension contributions. That figure will rise to a minimum of 20·5 per cent. The 11 million people contracted out of SERPS, who now pay a minimum of 17·25 per cent. in national insurance and pension contributions, will be required to pay a minimum of 20·25 per cent.
The abolition of SERPS will make pension provision more expensive for everyone currently and in the future. A guarantee of a decent pension is to be torn up by the Government. With their proposals to abolish SERPS, the Government are not facing the future, as they claim. They are betraying the future of millions of people who will have no realistic means of providing themselves with a decent and dependable post-retirement income. That is a betrayal that applies to today's citizens as much as to tomorrow's. The Government are trying to give the impression that they are seeking to direct benefit more effectively. That is their second aspiration.
The Government talk a great deal about targeting and trying to give the impression that they want to mix compassion and prudence, and that they want to offer the country a mixture of provision and genuine pity.
All experience of Toryism, ancient and modern, is that targeting is not inspired by the aim to help those in need. It is a system operated to limited means-tested aid to the most pathetically destitute. That is what the Government mean when they talk about targeting. Whether it is applied to heating allowances, death grant, matenity payments or housing benefit, the targeting system—nothing that the Secretary of State said this afternoon dissuades us from this—exists to deny, to deprive and cheapen, and not to meet genuine needs of our society. It exists to humiliate, not to help. It exists to put shame back into need.

Mr. Richard Tracey: A few moments ago the right hon. Gentleman promised my hon. Friend the Member for Teignbridge (Mr. Nicholls) that he would tell us the rate of taxation that our children would be paying

to finance the Labour party's plans for SERPS. Will the right hon. Gentleman now tell us whether it is right, as The Economist predicts, that it will be 45p in the pound?

Mr. Kinnock: No, that is not right. [Interruption.] Here we have a Government with a majority of 190 asking for the figures. I am not going to give them. The hon. Gentleman had better answer two other questions. First, what contribution rate will be needed to meet social security needs and pensions in 2015 or 2035? Secondly, if he thinks that SERPS must be abolished to lighten the load, how does he think that private pension schemes will pay for the pensions of the next century? Will that be any cheaper? It will be cheaper only as a result of the conscious betrayal of the people by a Tory Government in 1985 because the basic national insurance benefit, which is all that they will have, will be worthless. That is what the hon. Gentleman must accept if he will not face up to the options and the requirements of the future. We shall do that. Let him try to persuade his right hon. Friend to do so, then we shall have more respect for him.
The Government propose what they call "nilcost" reform — the idea that the sums taken from some claimants and beneficiaries can be transferred to others. As the poor will assist the poor, it is an exercise in crumb shuffling. It is a transfer from the near-poor to the near-destitute; from the needy to the wretched. It means depriving those who are barely managing. They are to be robbed, but even the transfer of those resources—which is not guaranteed—will fail to help those in the depths of poverty.
The result of depriving those who are near-poor to help those who are near-destitute will be a huge increase in poverty overall. I shall use the example of housing benefit. Some 7·2 million households, including 4 million pensioner households, will lose some benefit, and some 1·8 million households, including 1·2 million pensioner households, will lose benefit completely. That will deprive those households without giving anything worthwhile to those who are even poorer—conceivably their sons and daughters. That will hammer pensioners with small occupational pensions.
In my constituency, for example, there is a 68-year-old widow. She is an owner-occupier, as so many of my constituents are because Wales has a great many owner-occupiers. She may be in receipt of a pit pension, a British Steel Corporation pension or a works pension of some kind. She will be hit, because she and her husband were prudent, thrifty, earnest and fastidious enough during their working lives to set something aside to provide an extra £10 or £12 a week. The Government now intend to take housing benefit away from that woman.
They will not admit it yet, but Conservative Members know very well that there is poison in the Government's proposals for those people who might currently think, in their thriftiness in retirement, that they are not affected by the Government's proposals and that the Government would not harm them after their lifetime of service and work. Well, they have some sad news coming and the most appropriate people to tell them are Conservative Members. They ought to tell their constituents now what will happen to the 70 to 80 per cent. of them who are getting housing benefit. They should do one of two things — stand up against the Government and stop them undertaking this act of larceny or take cover, because the wrath, when it comes, of those people—the unjustly


deprived—will be mighty and just. It will happen in other spheres—for example with the social fund. The Secretary of State was characteristically evasive when I asked him about it. It is cash limited, but it is as long as a piece of string, or that is what we were given to believe. We shall examine it more closely when we have some figures.
Whatever benefits may be claimed for the social fund or the income support system, simplicity is not one of them. They will introduce a system of eight different classes of benefit in the income support system and a cash limited social fund, presided over by local benefit officers with supplementary training. That will be very good for local benefit officers. How many ways can you say no? Will they need special training to tell people they have run out of the fund or that these people are getting too much pay to qualify for the income support system? Is that what the Government mean by simplification? It does not give simplification or coherence. It gives us a nasty byzantine mess which will snarl up and deprive even more people.
The Government say in the Green Paper that they want to end the Dickensian paper chase. That is a sweet thought. They cannot do that by installing a Dickensian pauper chase which only Mr. Bumble the Beadle and possibly the Secretary of State would be happy with. Family credit will be a nightmare for employers and for those entitled to claim. Employers will need to know the household income of claimants to judge their entitlement. The implications of that in terms of privacy, complexity and administration costs for the employer are huge. The Government, in their family credit proposals, are not decreasing complexity and introducing coherence or simplification, but increasing complexity and passing it on to employers. These days it seems that even chaos must be privatised.
The Government tell us that unemployment is caused by higher wages and, in the same breath, they tell us in the Green Paper that unemployment is caused by higher benefits. Well, it is one thing or the other. They say people cannot get work because wages are too high and that people will not take work because the benefits are too high. It is never the Government's fault. That is what they always tell us. Now, with family credit, they have a new message for the low paid. They are saying, "Take low wages to price yourselves into jobs like good little workers, but do not take wages so low as to entitle you to family credit for, if you do that, you will either not dare to take increases for fear of losing credit or you will be in such problems" — [Interruption.] Is the right hon. Gentleman trying to tell me that family credit, subject to a six-monthly review, will not vary according to the level of wages received by the low paid?

Mr. Fowler: No, but I am trying to tell the right hon. Gentleman that it represents a considerable advance on the family income supplement system, and that basing it on net earnings is a substantial step forward. I am sure that the right hon. Gentleman wants people to be better off and to be taking an increase in salary so that they are better off in work than on benefit. Does he not want that?

Mr. Kinnock: I am strongly in favour of that, but perhaps the Secretary of State can answer another question. Does he think that there is no danger of employers in the system further reducing wages, confident that the deficit can be topped up by the taxpayer? I am anxious for a reply. It appears that the right hon.

Gentleman does not think that there is any such danger. I must tell him that the sad thing is that, because of the Government's majority, we might have a chance to find out, but I think that my estimation will be nearer to what happens than his.
In the family credit system, there is no extra independence as the Government suggest is the last and the finest of their objectives. It is insulting and dishonest for the Government to suggest that their proposals do anything to increase people's independence. We are being offered "stand on your own feet" Toryism which will give more people the right to live on their own knees. That is the essence of the Green Paper and of the philosophy of the proposals behind it.
The Government can quote Beveridge and say that security should not stifle incentive, opportunity and responsibility in establishing a national minimum, but when the national minimum is so low, so conditional, so inaccessible, so subject to poking and prying and so subject to means testing, it creates permanent insecurity. That is what the poor will be doomed to if we implement the proposals in the Green Paper. When that permanent insecurity exists, there is no incentive to respond to, no opportunity to be taken, no means of exercising responsibility—much as people would like to exercise it. There is only that paralysing, numbing and disabling state of poverty. Conservative Members must be familiar with it. They do constituency work and must meet people who are poor and who are obsessed in every word and action and thought by their poverty. It is inescapable. It surrounds them constantly and dominates their every consideration.
The idea of those people exercising initiative and of their taking an opportunity of fulfilling responsibility is a taunt and a mockery. That affects men and women, but most it affects women because women and children form the majority of the poor, whether they are low-paid mothers with families, widows with or without families, single parents, wives of men who are unemployed, low-paid or part-time workers getting Britain's lowest wages, or single women unemployed. The fact is that those women are the majority of the poor. Under this Government, for the past six years, women and children have come last for aid and first for attack.

Mr. Kenneth Carlisle: Is the right hon. gentleman aware that what drives our constituents to despair is the fact that they simply cannot understand the complexity of the system and that when they get wage increases they are worse off? Those are two aspects of the system which we are trying to cure.

Mr. Kinnock: I am sure that the hon. Gentleman is sincere about his question and that he makes every effort to service his constituents. However, in this Green Paper, none of those needs are met. He had better re-examine what the Secretary of State says and the impetus behind the proposals. It is nothing to do with introducing kindness or tenderness into the welfare state, but it is the product of a Government who have shown such gross incompetence in their conduct of economic affairs that they have increased unemployment by 2 million and increased poverty by 3 million, the results of which are the vast new bills for social security which they must meet. With typical meanness, they have decided to respond not by generating employment, growth and new investment, but by cutting benefits and making the poor poorer.
The condition of women should concern us all. It is extraordinary that the awful disadvantages have been inflicted upon women in this country, by, to her credit, the first woman Prime Minister, who preaches thrift and prudence as great virtues—we endorse that entirely—and penalises people for exercising those virtues throughout their working lives. She penalises women and deprives them of the very means of being prudent and thrifty, which they want to be.

Mr. Robert McCrindle: rose—

Mr. Kinnock: I shall accept no more interruptions.
People in such depths of poverty know that, despite their being careful, prudent and fastidious, their income will nevertheless run out after five days of the week, and they will remain poor, not merely next week or the week thereafter, but next month and next year. They remain poor because the right hon. Gentleman who presides over the system has no ambition to use it to release people from poverty.
The poor hate their poverty, and we hate their poverty with them, yet the Government will now make it worse. The Government will worsen their position with the interlocking system of family credit and with cuts in housing benefit and income support. Poor people will be caught in an even bigger snarled-up mess of bureaucracy and means tests. The non-working poor will be disadvantaged by losing benefits and suffering new burdens, and the working poor will suffer from reductions ranging from school milk and school meals to housing benefit and other pass book benefits, which they can claim under the present system.
In this plan, as in every other, the Government will ensure that the burdens are borne by the working population, the poor population, the unemployed population, the pensioner population and the disabled population. That is what they have done in every respect in every Act during the past sad, sour, six years. Their changes will inflict massive disadvantages on many millions of people today and tomorrow. Their policies first impoverish people by denying them work and by inflicting cuts and disadvantages on them through local government fund cuts, health cuts and low pay. When the Government have created that extra poverty, they define the impoverished as a parasitic group who must be afforded only the most reluctant charity. When the Government have turned claimants of right into supplicants for benefits, they pass on their responsibility and put the blame, pressure, power and responsibility on overworked benefit officers, who become the front line between our needy and the British state. That is a poor law philosophy and practice, which demeans both the givers and the takers.
We are fighting and we will continue to fight the Government's defeatism. We shall fight their philosophy and proposals, not because we are complacent about or content with the present system, but because we want greater efficiency, simplicity and accuracy in affording help in the welfare state. In that enterprise our purpose must be to defeat poverty and insecurity, to provide care and opportunity, and not to increase misery and decrease dignity, which will be the direct consequences of the Government's proposed changes. Those aims must be common to the whole House.
The purpose of reforming our system must be to remove all divisions, not create further divisions, to eliminate poverty, not stigmatise it, and to enhance security, not destroy it, which will be the consequences of the Government's proposals. We have widespread support for those objectives of change, with consent and in the name of humanity, justice and opportunity. We have widespread backing in our campaign against these proposals. We shall continue to have support, because the Government's policies will diminish the whole country in that they will divide, impoverish and offend against the decency of the whole country.
Every measure of public opinion demonstrates the strong resilient decency of the British people, and shows that they want to wage war on poverty, not on the poor. The British people demonstrate that they are prepared to pay, not merely for themselves but to help those in need. When that comes from the British people, it is not soft sentimentality, but plain, common, ordinary British decency — the greatest attribute of our society. With their pinched and prejudiced attitude, their meanness and malice, the Government are entirely eccentric to that feeling of decency. We are left with the bile and spite of a Tory Government who are pre-Churchillian in their attitudes. I say to the Government, do not commit further wrongs, get rid of these plans and be British.

Sir David Price: Hon. Members will agree with the right hon. Member for Islwyn (Mr. Kinnock) about the need to find consensus for changes in our social security system. Other than in that respect, his speech bore no relation to the Green Paper. It was a pantomime effort and consisted of all the hyperbole that he uses in his more emotional moments.
Unlike the right hon. Gentleman, I congratulate the Government on their courage in introducing these proposals and in trying to face the changes in our society and their effects on our social security system. I congratulate them on their readiness to look deep into the next century. In pension terms, to think 50 years ahead is to deal with the present generation. In political terms, it is thinking at least 12 general elections ahead. Although some people would argue that that is thinking too far ahead, I congratulate my right hon. and hon. Friends on having the courage to think so far ahead. There was a time when the Labour party talked about forward planning, but from the right hon. Gentleman's speech it seems that the only planning that it does is thinking and looking backwards, if not in anger, at least with nostalgia.
The need for a major reform of our social security arrangements is shown in the chilling figures which appear in table 1.2 in volume 2 of the Green Paper, to which my right hon. Friend the Secretary of State referred. I remind the House, not in absolute terms, but in percentage terms, of what my right hon. Friend said. In 50 years' time the number of old-age pensioners will have increased by 42 per cent., and the number of contributors to pay for those pensioners will have decreased by 30 per cent. One does not need to be a senior wrangler in mathematics to realise that that is a major problem. Anyone who ignores that is being wholly irresponsible.
Furthermore — I interrupted my right hon. Friend when he quoted them—those figures are based on the assumption that we shall recover the birth rate, which has been declining during the past 20 years, to what it was in


previous decades. They are also based on assumptions about employment and economic growth which are by no means certain. The figures could be a great deal worse than those quoted. Therefore, my right hon. Friend and hon. Friends are being prudent in trying to face those harsh facts. It would be easy for them to ignore that and merely look to the end of this decade. The Government showed great responsibility by looking so far ahead.
We must never forget that, although we talk about the insurance fund, our retirement pension scheme is not funded, but works on a pay-as-you-go basis. We must always consider how big a burden we are entitled to place on the next generation at work. If the burden is too great, they will kick. Therefore, the Government are right and brave to undertake these massive reviews.
The Government are right to introduce their proposals as a Green Paper. I trust that none of us, above all not the Government, will be dogmatic about the proposals and that they are genuinely open for discussion. I am sorry that the Leader of the Opposition has already made up his mind about the proposals and closed his mind to further discussion. I found them complicated, and they require a great deal of study. I hope that my right hon. Friend the Secretary of State is open to changes in them that will come up during the period of discussion. I ask him; how green is his Green Paper? I hope that it is very green.
The scope of the Green Paper is massive, and I therefore regard this debate as simply the beginning of a long period of inquiry and discussion by us all. In view of the speech of the Leader of the Opposition, perhaps this is a needless and hopeless plea, but I plead for an attempt to find consensus in these matters. The time scale alone requires consensus, because over the next 50 years there will be changes of Government.
The Government's objectives as laid out in the Green Paper are threefold. They are objectives on which I think we can find reasonable consensus. The first objective is that the social security system must be capable of meeting genuine need. I think that we can all agree on that. The second objective is that the social security system must be consistent with the Government's overall objectives in the economy. I know what my right hon. Friend the Secretary of State is after, but I think that it would be more acceptable if it were rephrased to say that the social security system must be consistent with the economic and social stability of the nation. Other parties are entitled to disagree with the overall objectives of the Government of the day. I think that my phraseology would command more general consent.
The third objective is that the social security system must be simpler to understand and easier to administer. My right hon. Friend has pointed out, on numerous occasions, the complexity of the system. There can be no doubt about that. We have to accept a broader approach to the categories of clients for whom we will be providing help and support. It rejects the "fine tuning". I think that that appealed to many of us as a concept. From experience, I think that it is impossible to achieve "fine tuning" that is too sensitive and too selective. The Green Paper supports that view.
I agree with the criticism of the Leader of the Opposition about the absence of numbers in the Green Paper. We ignore at our peril the wise words of the great physicist, the late Lord Kelvin:
When you can measure what you are speaking of, and express it in numbers, you know that of which you are

discoursing. But when you cannot measure it, and express it in numbers, your knowledge is of a very meagre and unsatisfactory kind.
Many right hon. and hon. Members wish to participate in the debate, so I shall briefly draw the attention of the House to only three topics in the Green Paper. The first is the provision for the chronically sick and disabled I find this disappointing, and the reason is the absence of definite proposals. I know that my hon. Friend the Minister for Social Security is conducting a new survey of the disabled — a new Amelia Harris — and until we have it, it is difficult to proceed much further.
I hope that my right hon. Friend and his Department accept what to me is basic in our approach to the chronically sick and disabled; that is the difference between income support and the help that is given to disabled people, because of their disability, to bring them up to the starting gate in life. Into that category I put benefits such as the mobility allowance and attendance allowance. I believe that they are of an entirely different character from what is done on income support, and I hope that during these debates my hon. Friend the Minister for Social Security—

Mr. Jack Ashley: When the Secretary of State eventually gives the figures, and if they prove that disabled people will be worse off at the end of the review, will the hon. Gentleman be prepared to vote with the Opposition and against the Government?

Sir David Price: I have no reason to think that it will go that way. I was about to say that one thing that my right hon. Friend the Secretary of State has said in his Green Paper about the chronically sick and disabled is that he intends to bring in the blind more positively than hitherto. Several hon. Members on both sides of the House have been campaigning for quite a long time for an improved position for the blind, so as one of them I am very pleased. In general, therefore, I am hopeful that there will be not a worsening position, but an improved position, for the seriously disabled.

Mr. Frank Field: Can the hon. Gentleman give us an idea of the structure of benefits that we should advocate for the blind?

Sir David Price: I should be delighted to do so, but I am not a Minister; I am not in the Department. We are debating the Government's proposals. I could take up too much of the House's time by describing my own views. I was one of the original supporters of the Disablement Income Group. I should have thought that my general position on the disabled was well known to the House.
Secondly, I should like to refer to the age of retirement. In the last Session of Parliament I produced my own Bill, based on our Select Committee report, to try to make the retirement age equal between men and women, and flexible between 60 and 65. I was delighted to read in the Green Paper that the Government take that idea a stage further and are proposing that it should be made flexible between 60 and 70. That is totally constructive. As far as I am concerned, my right hon. Friend the Secretary of State need not carry consultation on this proposal any further, but should implement the proposal.

Mr. Rooker: rose—

Mr. George Foulkes: rose—

Sir David Price: I should also like to put to my right hon. Friend the thought that he should consider not just full retirement but the problem of semi-retirement. In a civilised society, many people wish to reduce their work burden as they get older. There is something between total retirement and total work. If we are trying to look ahead, we must bring that factor a great deal more into our thinking.

Mr. Rooker: rose—

Sir David Price: With the growing number of older people in our society, that becomes a great deal more important, and we must think much more imaginatively about what my right hon. Friend the Secretary of State calls a decade of retirement.

Mr. Rooker: Will the hon. Gentleman give way?

Mr. Foulkes: Will the hon. Gentleman give way?

Hon. Members: Give way.

Sir David Price: I do not want to detain the House for longer than I need to.
My third point is about family support. As I read it, the proposals for the family support—

Mr. Foulkes: rose—

Sir David Price: As I read it, the proposals for family support seem close to ideas which some of us were discussing in the 1972–73 Session in the Select Committee on Tax-Credit. That is why I await with anticipation the Green Paper of my right hon. Friend the Chancellor of the Exchequer on personal income tax. I believe that this is relevant; otherwise these proposals would be only a revamp for the family income supplement. I assume that they are very different. Let me remind the House of what we said in our Select Committee report. I refer in particular to the minority report produced by Lady Castle, in which she said:
The one field in which there is an overwhelming case for merging tax allowances and social benefits is in the case of children since there is no other equally effective way of preventing the existence of children from plunging a low-paid family into poverty. The proposed merger of child tax allowances, family allowances and FIS into a child endowment payable to all children including the first is therefore in principle wholly desirable.
That is something to work on. I see Opposition Members nodding—

Mr. Field: rose—

Mr. Rooker: rose—

Sir David Price: I shall not give way. I would love to carry on the debate, but I am not giving way, for the simple reason that many more Members wish to speak.

Mr. Ray Powell: On a point of order, Mr. Speaker. Is it right within the rules of the House for an hon. Member to refer to the report of a Select Committee? The hon. Gentleman has read from it at some length. Is that in order?

Mr. Speaker: If the Committee has reported to the House, it is in order. If it has not, it is not in order, but I imagine that it has reported.

Sir David Price: The Select Committe reported to the House on 20 June 1973.

Mr. Frank Field: Is there not one point that makes a difference between what the hon. Gentleman is commending to the House and what the Green Paper is

commending to the House — the fact that both the majority and minority reports of the Select Committee said that the credit should be paid to the mother rather than to the father, whereas the Green Paper says that it should go to the father?

Sir David Price: These are all matters for debate. I am glad to have the hon. Gentleman's support for my view that we should move towards a tax credit system. A further consideration is when both husband and wife are working. I look forward to my right hon. Friend telling me the Government's view on that. I am sure that the House and the Select Committee will go into that matter in detail. However, I am glad that we have established the principle that the tax credit approach is desirable.
I take seriously your counsel, Mr. Speaker, to be brief. Let us enter into what I believe will be a long debate about the future of our social security system constructively and enthusiastically, and not simply defensively and bitterly.

Several Hon. Members: rose—

Mr. Speaker: Order. As the House knows, I have been out of the Chamber for a while. When I announced that I would limit speeches between 6 pm and 8 pm, I had not anticipated that the Front Bench spokesmen would take 84 minutes. I therefore propose to revise my judgment and apply the 10-minute limit between 7 pm and 9 pm. I hope that those hon. Members who are called will not abuse that limit.

Dr. David Owen: A review of social security was inevitable and right. But what do we have from this Government? We have a menu without prices and a menu in which the central proposal is half baked—that is, the way in which they have chosen to abolish the state earnings-related pension scheme. It is a menu for which we are now beginning to calculate some of the prices. The poorest households—those with a gross income of £70 a week or less—will be worse off as a result of the changes. Among working families, single-parent families make big gains and there is some redistribution in favour of couples with children generally, which is welcome. But families with high housing costs, whether public or private tenants, will lose housing benefit and will be substantially worse off.
Among pensioners, those on or just above the supplementary benefit level will gain £2·50 a week. Pensioners who own their own houses lose heavily—as much as £3·83 per week. On the whole, the Institute of Fiscal Studies calculates that more than half of all pensioner households will be worse off.
The gainers under the review will be working and non-working families, with children, earning £90 to £150 a week. The losers will be the single unemployed under 25, childless couples in work and pensioners. It is now all too clear why the Government have withheld the figures so far and why they have insisted on a menu without prices. Put simply, it is because 3 million pensioners will be made worse off by the review. That is the larceny, and that is why we charge the Government with stealing from pensioners. That is why, in or out of SERPS, the basic pension element must be increased substantially.
The SDP-Liberal alliance sees considerable merit in a 25 per cent. increase in the basic pension as the consequence of the abolition of SERPS. If SERPS is


abolished, there is no more contracting out, so we could give an increase in basic pension by transferring the amount that is currently being put into the private pension industry through contracting out. I calculate that to be £3·5 billion, which could finance a 20 to 25 per cent. increase in the basic pension. It is a more comprehensive change, but it provides for comprehensive cover. It is also by far the most egalitarian scheme. It means swapping the contracted-out portion of occupational contributions under SERPS for a basic pension rise.
The half-baked portion of the review's menu relates to the privatisation of pensions. Although the Secretary of State has been fair in the terms that he has offered for the phasing out of SERPS, the compulsory private earnings-related pension scheme that he wants to take its place has neither the support of significant sections of the private pension industry—which were not consulted and are showing increasing signs of concern—nor the support of actuaries or accountants who doubt whether a private scheme is any more affordable than the presently structured SERPS that it is meant to replace. It does not have the support of the SDP, the Liberal party or the Labour party, so there is no all-party agreement on the Secretary of State's proposals.
It does not have the support of organisations devoted to the alleviation of poverty. Will the disabled, as Mr. Stewart Lyon fears, be sacrificed on the altar of expediency? In short, the Government's privatisation proposals put pensions back into the very political cauldron from which many of us hoped the inter-party agreement in 1975 had rescued pensions. While the current Secretary of State for Foreign and Commonwealth Affairs was very keen on the proposals; the Secretary of State for Social Services was less keen. That poses a dilemma not only for alliance Members but for everyone in the House who wants radical reform but political stability. We have lived through the period of the Boyd-Carpenter scheme, there was the Crossman scheme, the Joseph scheme and then the Barbara Castle partnership. All credit to Barbara Castle for her readiness to compromise in 1975. What I fear is that we may ditch that scheme and replace it with a Fowler scheme which, too, will be ditched in its turn. The pensioners will be the innocent victims of a party political squabble in which none of us is prepared to make any change in what we think are our most prized objectives.
Pretending that there is no problem over SERPS, as the Labour party does, is, quite frankly, to bury one's head in the sand.[Interruption.] If the Leader of the Opposition recognises that there is a problem with the financing of SERPS, we can begin to talk about what should be done. If he is saying that, he must be ready to enter into some form of discussion on how to reduce the cost of SERPS. If he is not prepared to do that— [Interruption.] I am prepared to do that. I have made it clear that we want a basic pension. The alliance has recognised the virtue of some degree of stability. We are prepared to look at the cost. Before the Labour party goes to the rescue of SERPS—

Mr. Kinnock: The House should have the benefit of greater detail about what the right hon. Gentleman is proposing. Nine years after heartily endorsing SERPS—together with the actuarial estimates about its installation and continual running—the right hon. Gentleman said recently that he wanted the qualifying period to be

extended from 20 to 30 years. That would grossly reduce the effectiveness of the scheme, but that is what he told the pension fund that he spoke to a couple of months ago. He also said that he did not want anyone to be able to claim under the age of 65, including women. He also said that other changes for widows would be desirable. If we are to have a general discussion, it would be worth while for everyone to know about that.

Dr. Owen: The right hon. Gentleman's intemperate speech is now more explicable. I never said anything of the sort. I said that we should keep the 20-year eligibility rule—not the best 20 years, but the average. I did not say that the pension retirement age should be raised to 65 for women; I said that we should follow the Social Services Select Committee's proposals for averaging out, bringing it to between 60 and 65 and having a flexible pension age.
Much more important, if we want to cut the cost of SERPS, we should look at the provision of the three pensions. We should allow the survivor to choose which pension is more favourable to him. Those are three serious proposals to cut the cost of SERPS. If the right hon. Gentleman is prepared to consider them, he should exact a price from the Government for changing the structure of SERPS. He should say that he will not cut the cost of SERPS unless the Government are prepared to trade in, as it were, to make it a more redistributive scheme. The scheme was a compromise in which the then Labour Government were forced to make concessions, as a result of which 50 per cent. of SERPS current costs are now due to inflation-proofing private occupational pension schemes.
The right hon. Gentleman should face the fact that no couple earning less than £6,500 per year benefits financially from SERPS. They get instead a basic pension plus supplementary benefit. It is not a perfect scheme. It could be changed with advantage to make it more redistributive, even at a lower cost. Such a response would make sense.
It would, of course, mean that we should all be giving up a little, but the prize would be great. The prize of all-party agreement would be immense, being stability in pension provision and structure into the next century at a cost the nation could afford, with a fairer and more redistributive system. Do not let anybody tell me that that would not be widely welcomed, including by the private pension industry and by pensioners, who are currently apprehensive about what will happen— [Interruption.] We are prepared to compromise. It would mean the Government dropping their scheme of privatised pensions. It would mean the Labour party recognising that there must be changes and a cutting of the cost of SERPS. It would mean us in the alliance giving up our basic wish to have a 20 to 25 per cent. basic pension. But it would be an important and substantial provision, and perhaps only now those in the private pension industry could bring it about. They made the compromises possible in 1975. They, in 1985, could make this House compromise.
We have heard much about Beveridge. For the long term, what would be the approach of a really radical Government? First, they would link benefit reform with tax reforms. The two go hand in hand. A basic benefit would be introduced simplifying and integrating the tax


and benefit system. Some of what the Secretary of State has done on child credit represents an important step towards a basic benefit, and we welcome that.
Secondly, such a Government would inject new money to float off the individual anomalies and restrictions that are always created by any reform of benefit. That is where this reform falls down; there is no new money and, while it is meant to be neutral, it is savage in its consequences on some individuals. To create that buoyancy for a radical reform of the social security system, we have said for some time that we should be prepared to abolish the married man's tax allowance, adding to any reform package £4·1 billion, which would ensure that the poorest made substantial gains and that nobody suffered harshly or unfairly.
Thirdly, a radical Government would tackle the hidden welfare state, where relief goes to the well-off through preferential tax treatment of the savings of the rich and where payments in kind distort the tax and benefit distribution pattern, company cars being the most obvious example.
Fourthly, a radical Government would expose the mythology surrounding the contributory principle. National insurance contributions are deeply regressive. They do not fund benefits. They are part of the Chancellor's overall tax take. The Conservatives have raised national insurance from 6·5 to 9 per cent. from 1979 to 1984, raising three times as much through national insurance contributions as they have lost through much vaunted reductions in income tax.
The combined effect of the present tax and benefit separation is that a couple earning £8,000, living in a council house and without an occupational pension scheme pay 26 per cent. of total earnings in tax. On the other hand, a couple earning £24,000—that is, three times as much — with a £25,000 mortgage and contributing 6 per cent., which is about average, to an occupational pension scheme pay 24 per cent. of total income in tax, 2 per cent. less. Such are the distortions of the system, and many hon. Members in all parties believe it is high time that it was reformed.
National insurance takes a far greater proportion of the income of the lower paid because national insurance has a threshold which starts lower, on £34·50, than with tax; employees pay a contribution, once over the threshold, based on all of their earnings, not on that portion that is above the threshold, as with tax; and there is a ceiling to the contributions, unlike for tax, beyond which the better-off pay nothing. It is time that we looked into that.
The course of true radicalism would be to abolish in time national insurance contributions both for employees and for employers and to abolish the rating system and introduce a progressive and simple personal tax structure based on three separate identifiable elements—income tax, social security tax and local taxes. A new corporate tax — perhaps a cash flow tax — would be needed to replace both the employers' national insurance contribution and non-domestic rates.
What we have is no Beveridge. It is, in many senses, a miserable reform package. It has within it the ingredients of some excellent ideas, but it lacks the financial buoyancy to make it a great reform. It also lacks that sense of trying to bring the nation together which is unfortunately the hallmark of this Government's divisive policies. If only

the Prime Minister would listen to the voices and treat this consultation period as a genuine period of consultation and say that she is willing to pay a price for stability in pension provision into the next century. That would be the modern equivalent of Beveridge—a great Liberal reformer—and it is no accident that it is to such a broad programme that the alliance is committed.

Mr. Ralph Howell: I wish at the outset to congratulate the Government on those parts of the Green Paper with which I agree. I congratulate them on their courage and foresight in tackling the problem of SERPS. That was indeed a courageous step and they have my fullest support in tackling what is a grave problem confronting the nation.
The Government were also right to have initiated major reviews, although they should have included the taxation system, as the right hon. Member for Plymouth, Devonport (Dr. Owen) pointed out. More has come out of the reviews than I had expected. Although what we have is not a new Beveridge, it could be an important stepping stone towards the new Beveridge that we must have at the earliest opportunity.
I welcome the proposed changes for the under-25s. It is high time that we put a stop to some of the nonsense that has been going on, with young people leaving home and being able to obtain benefit too easily. That has been a major factor in discouraging young people from working. Even worse, it has destroyed the authority of the family. Reform of that aspect of the system is long overdue, and I welcome the steps that are being taken.
That said, there are other aspects on which I am not so keen. I am particularly disappointed that there is not to be a radical change in the system of child benefit. It no longer makes sense to give a universal child benefit to everybody, including the most wealthy. It should be means-tested. Any family with an income of more than £120 a week pays more in income tax and national insurance than it receives in child benefit and housing allowance.
It is ridiculous for us to be imposing heavy taxation with one hand and giving benefits with the other. Taxation could be cut by £3 billion if we had the courage to face up to means-testing child benefit. Nobody who needed it would suffer and it would be a logical step to take. We tax the very poor—for example, widows and pensioners—to give tax-free money to the richest, the highest taxpayers, and that must be wrong.

Mr. Frank Field: The hon. Gentleman is ignoring one point about which he normally informs the House. Child benefit has two roles — first, the benefit that he is describing, and, secondly, the tax role. How can the hon. Gentleman put forward an argument along the lines he has described unless he says also that other personal tax allowances should be abolished at the same time as child benefit is abolished? Unless the hon. Gentleman does that, he is shifting the burden of taxation from those with children to single people.

Mr. Howell: I agree that some tax allowance should be incorporated in the new system.
This brings me to another criticism. We are proposing to extend social security in the form of family credit to those in work to solve the problem of making it worth while to work. This is the wrong way to proceed. We are


suggesting that we shall repeat the mistakes that were made in 1970 or 1973 when we extended housing benefit to the private sector. We must find a means of reducing the extent of social security. Between 20 million and 22 million people — nearly half the population — are receiving benefits. I think that everyone will agree that it is intolerable that more than half the population are receiving benefits.
My criticism is that we have not combined this review with an overall review that includes taxation. There is no logic in this proposal, nor can it he successful. The graphs in the Green Paper are meaningless because they do not take account of the impact of income tax at 30 per cent., or whatever the percentage will be in two years' time. The graphs cannot be smooth because the poverty trap will be seen when the impact of taxation is imposed on them.
I urge my right hon. Friend the Secretary of State to consider holding back the review until we have the Green Paper on taxation. We should then combine the findings of that Green Paper and the ensuing White Paper in an overall White Paper that takes account not only of welfare and taxation but of our employment systems.
We have heard a lot about the Beveridge report. This Green Paper has been portrayed as a new Beveridge report. Neither my right hon. Friend the Secretary of State nor the Leader of the Opposition mentioned what Beveridge said about unemployment. We have never put the Beveridge report fully into operation. Therefore, we are in this appalling position. We still have not found a clear way out of our difficulties. It is as though we are in a similar position to a case reported a few weeks ago in the press. A lady was driving up the motorway with only three wheels on her car and sparks were coming out as the axle hit the highway. I do not want to go too far along the road of that analogy. Suffice it to say that the Beveridge coach has had only three wheels—the fourth was never put into position.
Beveridge said that, after a certain period, people would become dependent upon benefits and would become comfortable living on them. He said that paid work or training must be offered to the long-term unemployed in place of benefit. I believe that that can and should be done. We have come a long way with community programmes and other schemes. Why not have a comprehensive, as-of-right community programme? We would then be able to make considerable savings. If every adult were offered work at £80 per week, or £2 per hour, and unemployed 16-year-olds were paid, say, £40 a week, the 17-year-olds £50 a week, and so on, the entire cost would be less than £11·5 billion. Not all the unemployed would turn up for work — many would not wish to work the full 40 hours—and the probable cost of offering every one of the long-term unemployed the right to a job would probably he no more than £7 billion. We are spending between £15 billion and £20 billion on unemployment benefit and measures to solve the unemployment problem. Considerable tax cuts could then be made to get the Government off the backs of all those who are working and creating wealth. If this suggestion were seriously examined, I believe that we would find a way of raising tax thresholds — hon. Members on both sides of the House recognise that this must be done — and disengaging benefits from taxation.
No person should pay tax and receive benefit at the same time. Those with high incomes should pay tax and those with insufficient incomes should receive

benefits. There should be an incentive area where a considerable number of people in the middle neither receive benefit nor pay tax. Until we have such a comprehensive review, we shall never get out of our difficulties.

Mr. Hugh Brown: It is a privilege to participate in this debate, which has been excellent so far. There have been some original ideas, even from the hon. Member for Norfolk, North (Mr. Howell). I hope that I shall maintain that standard.
I begin by referring to some qualifications to enable one to contribute to the debate. I should refer to the type of constituency that I represent. Half of my constituency is officially described as a deprived area. A report published last week referred to my region in these terms:
Male unemployment of 40 per cent. and much higher in some neighbourhoods;
Overcrowding at seven times the national rate;
Three in four households without a car—twice the national level; and
Almost one in 20 infants dying before their first birthday—five times the national rate.
That shows some of my qualifications to contribute to this debate.
The local DHSS office in my constituency is one of the largest in the country, with a staff of more than 200 and a live load of 14,500 supplementary benefit cases, 7,000 of them unemployed. There are 27,000 claims for single payments a year, 2,000 of which are either disallowed or are the subject of appeal. About 4,000 people receive direct fuel payments. That is another reason why I think that I can highlight some of the problems concerning social security.
Another qualification for participating in this debate is one's personal experience. I know that I am getting old. I can even remember when the Beveridge report was introduced. I have been a member of the parliamentary Labour party's health and social security group since becoming a Member. I have had the unique distinction of spending 15 years in a local DHSS office. I think that I am in a better position than most to appreciate the words of my right hon. Friend the Member for Islwyn (Mr. Kinnock). The result is that the service to the public too often fails as the staff hunt for files in a Dickensian paper chase. Anybody who has worked in such an office will know the truth of that statement.
There have been changes during the 40 years since Beveridge was introduced in a wartime atmosphere of full employment. It is sad that the only countries that enjoy full employment are either Communist or Fascist or democracies during periods of war. No hon. Member can suggest convincingly that we have all the solutions and that society can be transformed overnight by abolishing unemployment. Nevertheless, we should examine present conditions and those that prevailed at the time that Beveridge reported.
There were hopes then of a better life. Peoples' aspirations had not been so tainted by the poverty and depression caused by unemployment during the 1930s as is apparent now. It is tragic that, although 4 million people are unemployed, there is no outcry. Even the attitude of the Left wing of the Labour movement was different then; it was fashionable to be against Beveridge because it was


thought that to support reform would help to bolster capitalism. Thank goodness that the Left wing of the Labour party has learnt a wee bit during the past 40 years.

Mr. Jeremy Corbyn: But not much.

Mr. Brown: My hon. Friend the Member for Islington, North (Mr. Corbyn) says that we have not learnt much. However, I am a pragmatist. If I am properly to represent my constituents, there is merit in looking at the way in which we can help the disadvantaged. The Labour party's manifesto for the general election in 1983 contains certain points upon which we can all agree. On a fairer benefit system the manifesto said, "We shall reform it." It then said:
Forty years have elapsed since the Beveridge Report which led to the setting up of the National Insurance scheme by the postwar Labour Government. We shall conduct a thorough review of the scheme in the light of today's circumstances.
All hon. Members agree that the system needs to be reviewed and reformed.
That does not take us very far, but it provides a background for the next point upon which I hope that there can be agreement—the need for simplicity. There is no hon. Member who is not completely baffled by the complexity of the system. I used to be able to say what the rate of benefit would be and that a constituent would qualify if he had made various contributions, but when a constituent comes to see me now, I sometimes have no idea what kind of benefit he is talking about, so many of them are available. It is desirable that any system should be made as simple as possible. Computers would provide better assistance for overworked and sorely tried staff who are trying to provide this service.
All hon. Members are in favour of the general principle, but how can it be implemented? I am a practical man. My constituents do not like waffle, rhetoric and speeches from me. They want to know whether they will be better off under the new system than they are at the moment. What is the answer? I am sure that the Secretary of State could not provide them with an answer to their question. He would have to say that it would depend upon this and that and it would depend upon the level of benefits and personal circumstances.
The Secretary of State knows that single payments are an important part of the income of very many people. If all the single payments are to be absorbed into a universal rate, it must be set at a much higher level than is contemplated. That is the dilemma that will face any Government. They will have to try to find resources with which to apply a sound principle that is accepted by most people. Will the Secretary of State be able to provide further information? I am unable to tell my constituents whether they will be better off, or whether this is just a sham and a public expenditure exercise that is designed to save money. I do not think that it is, but there is an element of doubt about it. The Secretary of State knows that he is stuck with a review that has been badly costed. It is not very encouraging to have to begin a review of anything in that way.
It is said that income support will be simple to administer, but it is surrounded by practical problems. Premiums will be paid to different client groups. We shall need to know into which group a constituent fits. The payment will then be topped up with a certain premium,

but we do not know what it will be; and if the premium is not sufficient the social fund will be used. The Secretary of State was asked about the size of the social fund budget.
There is merit in local benefit officers being given discretion to provide a top up, but that is very difficult to comprehend after more than 40 years of an adjudication and appeals procedure. There will be no appeals machinery against the new system and no scrutiny. I do not complain about the officers who serve my area. They are co-operative and thoughtful, but a great responsibility will be placed upon their shoulders.
The Secretary of State said that we should not build up a great deal of case history. There is merit in that suggestion. Commissioners' decisions are getting out of hand. An expert is needed to advise upon what another expert said about something one did not understand in the first place. How is humanity to be built into the system? Is my constituency to be treated in the same way as those of Conservative Members who know very little about the way of life of my constituents? Will the machinery allow my constituents to get more out of the system than the constituents of other hon. Members? Who will make the judgment? What will be the criteria? Shall I, as a Member of Parliament, be consulted? Will the community groups in the area be consulted?
I should warn the Secretary of State that now there are welfare rights officers. Welfare rights organisations are to be found throughout the country, and a decision that is favourable to one of my constituents in Provan is soon communicated to other people throughout the country. We are almost back to where we began in trying to consider the universality of benefits and rights and the tremendous increase in resources that will have to be devoted to this part of the social security system.
I have not referred to housing benefits, savings on pensions or many other matters that my hon. Friends will be raising. I have simply raised some of the practical problems facing any Government in this one aspect of one part of the social security system, but I say this with some conviction. The priority should not be tax concessions for the wealthy. That would be obscene in view of the contrasting life styles and opportunity to enjoy life in society today.
It would be quite wrong and it would not be tolerated if any Government proceeded with a cost-saving exercise designed purely to hand out more to the wealthy. I believe that a Labour Government could distribute wealth more fairly and better than ever before. The challenge is whether we can create more wealth. I am not complacent. This is a huge, complex problem. It will take a great deal of guts and ability to solve it, but I believe that we can do it.

Mr. Tim Eggar: The hon. Member for Glasgow, Provan (Mr. Brown) will forgive me if I do not follow the observations that he made, but one cannot but respect his experience and sense of perspective.
The structure and objectives of the Government's proposals have been widely accepted outside the House, even if the debate so far has not given that impression. I especially welcome the assistance given to working families and the emphasis on simplification of the system.
I do not believe that the Government would have achieved that widespread acceptance outside the House if my right hon. Friend the Secretary of State had not had the courage to go to open consultation. In my view, it is no


coincidence that the proposals which have created the most controversy—those regarding the state earnings-related pension scheme — were the least discussed and publicised. I hope that lessons will be drawn for other areas of Government from the success of the consultation process instituted by my right hon. Friend.
In today's debate and throughout the discussions since publication of the review documents, a great deal of fuss has been made about the lack of figures. Yet when the Leader of the Opposition was asked today to comment on certain figures relating to SERFS 30 years on he deliberately refused to comment or to explain how the real increase in the cost of pensions would be met. In other words, having figures to discuss did not raise the level of the debate. I am convinced that my right hon. Friend the Secretary of State was right to ask us to concentrate on the structure before discussing the details. Had we been given the details, we should have had the fragmented discussion that we had in the consultation phase when each pressure groupb pleaded for its own section of the community.

Mr. Peter Griffiths: I do not often interrupt, but does my hon. Friend agree that if we are to have a Green Paper which does not contain detailed figures there must be adequate time between publication of the White Paper and the introduction of legislation to implement it?

Mr. Eggar: My hon. Friend anticipates my next point. If my right hon. Friend the Secretary of State and the Treasury wish us to concentrate on the structure at this stage, as I believe is right, they should not jump to any conclusions about the willingness of Conservative Members to accept particular levels of benefit. That discussion will come later and follows logically from the position that we have taken so far.
I have one major reservation about the proposals. I, too, should have welcomed more progress towards integration of the tax, national insurance and benefit systems. As was pointed out at Question Time today, there has been some movement in that direction with employers' payment of family benefit and the alignment of the pension and tax years. They are definite steps forward. I am surprised that my right hon. Friend the Secretary of State and my right hon. Friend the Chancellor of the Exchequer have gone out of their way to stress the importance of the contributory principle, because their measures actually move away from that principle. I hope, therefore, that after publication of the Green Paper on personal taxation they will make a clear and unequivocal commitment to work towards integration of benefits and taxation. I believe that that would be welcomed in all parts of the House.
I am tempted to make various detailed comments, but I shall restrict myself to three areas. First, I believe that Conservative Members and the public in general accept that everyone in the community should make some contribution to the provision of local services. We must, however, look very carefully at how the level of that contribution is implemented. I believe that a sudden increase to a 20 per cent. contribution to the rates bill would bear unduly harshly on many people, whether they have frugal or high-spending local authorities. I do not believe that the problem can be circumvented by means of the income support system. I believe that the contribution should be phased in over a period of years rather than increased it to 20 per cent. at one gulp.
Secondly, there is the suggestion that we are moving towards a decade of retirement and a flexible retirement age. I welcome that unequivocally, but I hope that there will be a very speedy response to that proposal from the occupational pension funds. Many of them are significantly overfunded and this is a major opportunity for them to work with the state to produce an incentive for people to retire in their early 60s. I hope that my right hon. Friend the Secretary of State for Employment will play a catalytic role in this context.
Thirdly, there is the impact of the reviews on DHSS staff and their method of operation. In 10 years' time, local offices will bear no resemblance whatever to those that we know today. In addition to technical change, the advent of the social fund, which I certainly support, will demand a level of skill, responsibility, discretion and decision-taking from local benefit officers far exceeding that which they are called upon to exercise today. The first priority of the new social security management board must therefore be to institute major training programmes and to develop further the proposals already introduced in the Department towards devolving budgeting and decision-taking to regional offices and from there down to local offices.

Mr. Jim Craigen: Will the hon. Gentleman give way?

Mr. Eggar: I would rather not, if the hon. Gentleman will forgive me, because the time is short.
We all know that these proposals involve major change — change which is long overdue and is certainly welcome to nearly all of us on the Conservative Benches. The proposals are a challenge to Ministers, which they have so far risen to and met extremely well. But I suspect that there are choppy waters ahead as we come to discuss the detailed levels of benefits.
The proposals are a challenge to the Department as well, because it will be called upon to make a major management and philosophical change in the way that it operates. The permanent Civil Service officials within the Department have a duty to show all of us in society that they have the ability to manage that change. That is a significant challenge.
The proposals are a challenge also to all of us in the House. We must have the courage to face some political criticism now in order to avoid placing a burden on future generations. That is not an easy thing to do as politicians. That will also be a challenge in the coming months, as we have to take a broad view of the benefits to society as a whole of these proposals, rather than the benefits or disbenefits to certain particular sectional interests, which I am sure will be championed very effectively by many of the claimants' unions and others.
I believe that my right hon. Friend's proposals should command the support of the House tonight.

Mr. Jack Ashley: The hon. Member for Enfield, North (Mr. Eggar) is obviously living in cloud-cuckoo-land. He says that these proposals have been widely accepted outside the House. Could anyone believe that? I have never heard a sillier comment in any debate for years. These proposals have aroused a sense of outrage among ordinary people, because they are going to damage ordinary people. When hon. Members speak


about "outside the House" they should not be speaking just of stockbrokers and other well-off people outside the House; they should be speaking also of disabled people. People I have spoken to, and other ordinary people, are outraged by these proposals.
It has also been said that these are courageous proposals. They are not so much courageous as callous, because they will damage poor people very much indeed. And of all the destructive actions in these Green Paper proposals the worst is the abolition of SERPS—the state earnings-related pension scheme.
The Government cynically suggest that the simple substitution of private pensions will solve all problems. Of course, they live in a very different world from the millions of poor and disabled people who were relying on SERPS for a decent old age. The prosperous people with friendly bank managers and accountants and all the accoutrements of wealth and a comfortable middle age will have no difficulty in fixing up nice cosy pensions; there will be no problem for people like that. But the poor people and the disabled people will not know who to turn to.
The Government are to give free rein to the fly boys. Many pension companies will not bother looking at poor people; they will not want to know disabled people with small incomes; they will reject them and provide nothing. And the clever fly-by-night pension schemers will come back. We shall find people operating just as they operate with encyclopaedias and double glazing. The smooth talk will go on and ordinary people will be flummoxed and will not know what to do. They will be out-talked and out-manoeuvred by the crafty boys, and they will suffer very much indeed. Their pensions will be either non-existent or very low. It will be the "Fowler's Folly" pension line for the poor and the disabled.
The ending of SERPS is a disaster for disabled people because SERPS, unlike private pension schemes, gives flexibility and allows help for the less fortunate. In particular, state earnings-related pensions are based on the best 20 years of earnings, and that makes all the difference between poverty levels and an adequate pension.
Disabled people are also very worried about what will happen to the earnings-related element of invalidity benefits when SERFS goes. The little bit of security that this gives disabled people is threatened by the bland comment in the Green Paper:
The Government is giving further consideration to the implications of the new arrangements for invalidity benefits.
They can say that again. I hope that it will be very careful consideration.
Three quarters of disabled people rely on supplementary benefit in their effort to get a decent standing of living. They face very heavy additional costs, and supplementary benefit is of crucial importance to them. The proposal to end the supplementary benefit additional payments and replace them by a disablement premium sounds fine when Ministers stand at that Dispatch Box, but I warn the Government that this premium will have to be a very generous one indeed. We do not want any piffling token gesture by the Government, because if they do not make a very generous payment, severely disabled people are going to be in what the hon. Member for Enfield, North called "choppy waters"—a good phrase for the plight of

someone with no money, no pension and unable to buy food even. "Choppy waters," the Government will say, "that is what you are in."
Disabled people will require about a 30 per cent. supplement to their income provided by the special premium. That is necessary. Anything less than 30 per cent. given by the Government in that special premium would mean serious hardship for disabled people.
The supplementary benefits extra payments, although means-tested, were made available by right and each one could be claimed if it could be justified. They are a tolerable way of meeting individual needs until we get a proper disability income. The proposed system of just one premium will falter at that fence and will actually fall, I think, at the other fences.
I also note that the Minister has pledged full protection only in cash terms and at the point of transition. In other words, that is a loss leader. What happens when the disabled people get past the shop window? What commitment is there—I should like an answer to this at the end of the debate, if possible—on real value and for the longer term?
I have no doubt that many disabled people will find the extra costs of disability far higher than one disability premium. Few non-disabled people quite appreciate what extra costs mean. Disabled people require extra heating because they cannot move and are confined to wheelchairs; they require extra food for special diets; they require extra clothing because of heavy wear; they require extra bedding if they suffer from incontinence. All those extra costs are the responsibility of society, and society is represented by the Government. The Government really ought to meet those special needs in their new system. The indications are that the premium will be grossly inadequate.
Finally, there is no mention in the Green Paper of those who care for disabled people. They are very important. I do not mean the paid professionals but the friends and relatives and people like that who go along to the homes of disabled people and help out. There must be some special provision for those carers because without them, the Government's bill for looking after disabled people in institutions would be enormous. The Minister might be able to calculate what sort of bill he would have to pay if the carers backed off. They do not do so. They help disabled people because they want to.
I have kept well within my 10 minutes, and I should be congratulated for that. I hope that the Government will do far more for disabled people than they are doing. They should talk to the organisations for the disabled, which have well-briefed, expert individuals. They will help out and give him all the facts and figures, and disabled people will give their experience. If that is taken into account, then, and only then, shall we have a proper Green Paper for disabled people.

Mr. Robert McCrindle: There is much in the Green Paper of which I strongly approve. Some parts of it require clarification and one or two approaches are flawed. To start by accentuating the positive, the Government are to be congratulated on recognising the disincentive effects of what has been called the unemployment trap. The promise in the Green Paper that we shall be moving towards a situation in which it will be impossible for anyone out of work to have a


larger income than anybody in work is a move in the right direction that should be welcomed by both sides of the House.
The family credit scheme is broader in its application than the family income supplement. It is an effective bridge between the incomes of those in and those out of work. The fact that we are moving towards a system whereby employers will be responsible for payment, which will be carried out through the wage packet, is a move in the right direction, as is the consideration of the net income after tax as the trigger for payment rather than what has been the case in the past.
Still accentuating the positive, I turn my attention to the income support scheme, which is to replace supplementary benefits. Here, the aim is to provide a reasonable level of help and then let people manage their own financial affairs. I noted from Labour Members a tendency to expect not only high benefits, which we understand, but a nannying approach to people as though to imply that, because one is on social benefit, one is incapable of looking after one's own finances. That is not a proper approach, and the income support scheme aims in the direction of the removal of that approach.
Under the scheme there will be welcome additional help for particular groups. Among those groups are families with children, the long-term sick and disabled and lone parents. That commends a scheme which I sometimes think, while I listen to Labour Members, they must have overlooked.
Another part of the Green Paper that I warmly welcome is that relating to the proposed changes in capital and earnings rules. I warmly welcome the idea that there is to be a sliding scale up to £6,000 before benefit is discontinued. The sharp cut-off is a disincentive for thrift, and this party, of all parties, should never be on the side of penalising those who seek to make some preparation for their old age or misfortune.
The proposal that people will be able to earn up to £15 a week before unemployment benefit is effective, subject to two years unemployment, is a step in the right direction. If I were to press my right hon. Friend the Secretary of State at all, it would be in the direction of considering whether the same approach is not possible after one year. After all, for most people, one year is still long-term unemployment. Will he give some thought to that?
I warmly welcome two changes in the Green Paper—those in the maternity grant and the death grant. I have long considered that the £25 maternity grant is not even capable of purchasing a decent cot. It is not required and not appreciated by a vast number of people, but some require a great deal more. To be moving in that direction earns my commendation.
The same applies to the death grant. The £30 death grant is an insult to many people, while it is cruel and inadequate to some who need vastly greater help. The fact that the Government are to concentrate assistance on those areas where it is needed will ensure that anything up to 10 times the £30 is payable when it is needed.
I warmly welcome the idea of the social fund, but I am a little concerned about the fact that it is to be cash limited. By all means, let there be some intimation in, the Budget as to how far we can go in that regard, but if it is to meet emergencies there is a possibility of an overspill in finance. Will my hon. Friend the Under-Secretary tell us

whether something can be done to bring a greater sense of assurance to those who will obtain their benefits in future from the social fund?
There is no question but that housing benefit has been difficult to administer and not always understood. Therefore, simplification has been needed and reform is overdue. However, to move from six tapers to one can lead only to a loss of part or all of the benefit for people who are by no means well off. Has my hon. Friend considered the fact that those with a small occupational pension, and in particular widows of those with a small occupational pension, could be affected by this change?
Furthermore, if we are to commend the idea of occupational pension schemes in one part of the Green Paper, it may not be altogether wise to penalise in another part those who moved into occupational pension schemes some years ago. I appeal to the Government to keep an open mind on housing benefit reform and to see whether there is some way to cushion the movement from housing benefit.
I am quite well disposed to the idea of expecting people to become involved in a contribution to local rates. However, I wonder whether it is wise to contemplate moving to a system in 1986 in which all will have to contribute to local rates when, in 1988, if one is to accept the direction in which I think the Government are moving, there may no longer be rates to contribute to. Is there not a better way than introducing a system only to wind it up fairly shortly afterwards?
I have a long connection with the pensions business, and I believe that there is great merit in taking pensions out of politics. I should regret any move in the other direction. However, I must pay some attention to the Government's suggestion that we shall not be able to afford SERPS in the early part of the next century. While I do not deny the burden, I wonder whether it is entirely fair of the Government to base their estimates as to whether we can afford SERPS in the early part of the next century on predictions that seem to allow for no growth in the economy. While there may be a burden, the Government seem to have gone out of their way to accentuate it, and if there is even the smallest growth in the economy I suggest that, although it will be difficult, it will not be impossible to meet.
On balance, I should have preferred to opt not for the abrogation of SERPS but for simplification and amendment. I see no reason why we should not turn our attention to an adaptation of the benefits to reflect average pay over 20 years rather than the best 20 years of a person's working life.
However, I have to accept that the proposals before us are a great deal more acceptable than those that we thought might emerge before the publication of the Green Paper. On balance, I am prepared to accept that we shall move in that direction. I am prepared to welcome warmly the opportunity that this provides for the private pension sector, but I warn the House that this will provide only a panacea.
It is not often noted that the payments that are required under SERPS will not produce the same benefits under a private scheme. In part, this is due to the administrative costs of a private scheme and in part to the fact that index linking can be brought about only if there is sufficient Government index-linked stock. Nobody has referred to this. So that we can estimate the comparative benefits under SERPS and under a private pension scheme, perhaps


the Minister when he responds will pay some attention to whether the Chancellor of the Exchequer is likely in the new situation to issue sufficient index-linked stock to enable some form of index linking to continue in the development of personal pensions, which, broadly speaking, I very much welcome.
Although, this presents a great opportunity to the financial community, I think it also places a considerable responsibility upon it. I will be watching as the months go by with growing interest to see whether the Government will expect the private pensions world to be rather cautious in the estimates it makes of the pensions which are likely to be received. I shall have to leave the matter there and expand on it on a future occasion.

Mr. Frank Field: I hope that the hon. Member for Brentwood and Ongar (Mr. McCrindle) will forgive me if I do not directly refer to all the points that he raised. I will, I hope, touch on a few before I have finished. I aim to speak well within the 10 minutes.
Much has been made in this and previous debates about the lack of figures. The Government assure us that what we are considering is the structure of the scheme and that it is unimportant to have the figures to consider whether the structure is right. That is similar to someone in the medical profession saying that he can easily and effectively undertake X-rays without barium meals, yet we all know that it is the barium meal in the X-ray which points out the dangers, the weaknesses and the points of pressure. Without those figures, the Government know perfectly well that we cannot sensibly discuss the structure which they are putting forward, and discuss with them what we see as the scheme's weaknesses and dangers.
Even though the Government have hidden the figures from us, it is clear that one group will be singled out for special treatment. That one group is receiving this treatment because of the Government's concern to increase incentives to work. Without the figures, we know already that the under-25s who are unemployed are less likely to receive more benefit under the review than they now receive. In addition, we have to consider the Government's proposals to cut board and lodging allowances.
I begin my short contribution with a plea to the Government to look back to the measure introduced by the Labour Government of 1966 to 1970. It was very similar to the measure which the Government have now introduced, and was called the four-week rule. If there has been one move in the whole social security field since the war which I would dub as evil, it is that one measure. For reasons similar to those given by the present Government in putting forward this reform, the then Government became concerned about the length of time that young people were remaining on benefit, and cut benefit to four weeks for young claimants in certain areas. About 160,000 young people lost benefit.
Thanks to the work that Molly Meacher did, we now know what happened to many of those people. We know that half of them who were denied benefit did not find the jobs which the then Government said existed and were waiting for them to pick up, but had to resort to male prostitution and crime. Therefore, I put it to the Government that, whereas they are right and have the

support of the House in their attempt to control the abuse of some, perhaps many, landlords under the scheme, they are wrong in aiming those measures at young single claimants. I fear that many such young claimants will end up in the same position as many of the young claimants under a similar measure introduced by the Labour Government of 1966 to 1970.
In the absence of figures for the scheme, I want to consider the objectives which the Government say the scheme will fulfil and to ascertain whether those objectives are fulfilled. If one reads the Green Paper carefully, one sees that there are four in all. First, the Government say that help will be targeted on those who are most poor. Without figures, it is difficult to respond to that. We know overall that those who are most likely to be poor are women and children, yet throughout the Green Paper there are a series of measures which transfer resources from poorer women and give them to poorer men.
Let me give the Secretary of State a few examples. Under the family credit there will be a system which moves from the family income supplement, which is mainly drawn by the mother, to a situation in which, for reasons which the Secretary of State has explained and which carry weight in the House, the benefit will be transferred to most men. That is one of the transfers from men to women.
We also know that, with the abolition of SERPS, the widow's additional component will be lost. With the abolition of SERPS, we know that women generally stand to lose in another way. I believe that there are considerable faults with SERPS, and I was pleased that my right hon. Friend the Leader of the Opposition did not say today that we will re-enact SERPS when we win the next election. I think that that is a welcome non-pledge. One of the advantages of SERPS, however, is that it takes account of the fact that most women spend a great deal of time outside the labour force bringing up children and should not be disadvantaged when it comes to drawing a pension. But in the abolition plans women will lose. SERPS favoured lower-paid workers as against higher-paid workers. As most women are low-paid workers, this is yet another blow to women.
How can the Government say that this measure will target on those in greatest need? We know that it is women more than men who are poorer in society, yet in this reform women will be significantly disadvantaged by this move.
The second objective which the Government have set themselves is to simplify the social security system. Once the social fund has come into operation and questions are asked in the House about its operation, I wonder whether the Government will continue to maintan that that has been an effective simplification. Thanks to pressure from the Government's own Back Benchers, we now know that SERPS is to be phased out over a long period. Can one really say that that phasing out over a long period will add to the simplification? Given the solution which the Government have come up with, thanks again to pressure from their own Back Benchers and beyond, a number of us may well have three pensions on which to draw to make up one basic pension. Is that the simplification of the scheme at which the Government are aiming? Lastly with regard to simplification, the new family credit is to be run by employers. We all know the difficulties that will occur with take-up in a scheme run by employers. The


calculations will continue to be done by social security officers and they will be referred to employers. Where is the simplification in that measure?
Thirdly, we are told in the Green Paper that the scheme, once enacted, will increase incentives to work and will lessen the poverty trap. Both sides of the House should welcome any moves which achieve that end, but are the Government really telling us that the proposals which they are putting forward will add more weight to the incentives to work than, say, tax levels or wage levels? The Government's plans will ensure a reduction in the 100 per cent. marginal rate of tax which some claimants face to a situation where many more claimants face a marginal tax rate in the 90 to 100 per cent. bracket. Will that make a major difference to the real problem which many of our constituents face with regard to incentives to work—a problem with which I believe the Opposition have yet fully to grapple?
Lastly, we are told in the Green Paper that the aim is to reduce state help. Twenty or 30 years hence, will we be able to say that that objective has been achieved? The Secretary of State knows that the only measure on the statute book which will lessen the number of those who end up drawing poverty relief from the Supplementary Benefits Commission is SERPS. That is the only measure which in time is likely to break the link between poverty and old age, and that will be abolished by these measures if they go through. In its place is a proposal to fund part of the pension scheme from the private sector, yet nobody from the private sector has come forward to state that the level of contributions put at 4 per cent. will give a pension which will be inflation-proofed at a decent enough level to break the link between old age and poverty — a problem from which most of the population in the past have suffered in this country.
These, then, are the four objectives which the Government have set themselves and which I believe will not be fulfilled. If I am to achieve my objective of finishing within 10 minutes, I had better sit down now.

Mr. Andrew Bowden: I pay tribute to the Secretary of State, his team and all those involved in the immense amount of work that has been done in producing the Green Paper. We live in a very different world from Beveridge. In the late 1940s, the single pension was £1·30 and the married pension was £2·10. However, the Green Paper leaves many unanswered questions, and I believe that it has some serious flaws.
The only comment that I wish to make on SERPS is that if my right hon. Friend the Secretary of State wishes his scheme to remain in place for many years, he must, as the right hon. Member for Plymouth Devonport (Dr. Owen) said, look for broad, all-party agreement. If he does not obtain that, as the political history of the past 40 years has shown, his scheme will be scrapped and replaced by another. That would not be in the best interests of future pensioners.
I shall concentrate my remarks on housing benefit and housing subsidies. When one considers the history of housing subsidies, one understands that it was logical to reduce the general subsidies that used to exist, to change the system for rent and rate rebates and to provide a safety net for poorer tenants. In those days, the schemes were financed by, the Department of the Environment. It is

worth reminding the House that there have been tremendous savings in that Department's budget since 1979—at least approaching £1·5 billion. However, my poor right hon. Friend the Secretary of State for Social Services has had to pick up the bill in his budget. I wonder whether, considering the overall figures, that position was sufficiently taken into account by the Treasury. I doubt it.
Assuming that the Government are thinking about reducing housing benefit by about £500 million, I must say that, on the basis of one taper for rent and for rates, the proposals are unjust, severe and even callous. They will create real hardship for many pensioners. I cannot believe that the Government intend to hit 4 million pensioners, many of whom have had three cuts in their housing benefit during the past 18 months. I estimate that 1·2 million will lose benefit altogether, and that nearly 3 million will lose between £1·40 and £5 a week. I base those figures on the information presently available, but I trust that events and time will alter that position.
Let us consider a pensioner on a far-from-high income, remembering that we are talking about the joint comprehensive taper for rent and rates. A pensioner couple living in their own home with an income of £75 a week and paying rates of £9 a week will, as I interpret the proposals, lose no less than £4·70 a week. The proposals will hit many pensioners who worked for their occupational pensions, which are not inflation-proofed, on an unreasonable scale.
Another proposal in the Green Paper that disturbs me greatly is the intention to abolish the discretion given to local authorities. That would hit war pensioners and war widows especially hard. Do the Government really intend that some war pensioners will lose up to £10 a week? That is what their proposals, as presently interpreted, would mean.
I shall make two specific suggestions. First, the Government should consider separate rent and rate tapers. Instead of a composite 70 per cent., they should consider 20 per cent. for rates and 50 per cent. for rent. That would be fairer and workable. Secondly, local discretion must not be abolished. The Secretary of State said earlier today when he presented his uprating statement that the Government will help those most in need. That is right, but I remind him that there are also those to whom the nation owes a debt and those who through no fault of their own have had the purchasing value of their savings and occupational pensions largely destroyed.
I ask my right hon. Friend to think again about housing benefit. He must not penalise war pensioners and those whose occupational pensions have been destroyed by the policies of previous Governments.

Mr. Brynmor John: First, I should say that a consultation period which started at six weeks and which has now wound its way up to three months is a derisory period for a Green Paper of this importance. It shows what some Conservative Members still do not realise—that the Government have made up their mind on this matter, and that there will be no significant, as opposed to cosmetic, changes. The Government's approach to the matter is an attack on consensus
I wish to concentrate my speech on SERPS. I hope that I can base my argument on the affordability of the present system and on the burden, but one of the problems in this matter is the value of the words "the Prime Minister". This


is not the first time that rumours of what is proposed have surfaced. They surfaced before the 1983 general election, and I wrote to the Prime Minister—I gave her notice that I would raise this matter today—asking her for reassurance that she would support the SERPS scheme as it was then constituted. On 20 May 1983, she replied:
Nor are there any plans to change the earnings-related component of the state penson. The 1975 Act was in fact brought on to the Statute Book with the full support of Conservative Members.
The Government have gone back on that clear and unambiguous pledge. We must examine the reasons for that with some care. First, perhaps the Conservative party was considering those changes before the Prime Minister wrote the letter, but she did not choose to disclose it. That would be a very serious matter for the country and for the House. Secondly, to return to what the Secretary of State said earlier, perhaps something happened after the general election and the Prime Minister's letter to change the Government's mind—something so radical and startling that the viability of the scheme changed. The Secretary of State said that one reason was the availability of the 1981 census figures. It is interesting to note that Conservative Members, who are now calling for a return to concensus, do not remember that at no time since the census figures were available has the Secretary of State tried to discuss with other parties the difficulties that would be caused. Indeed, until just before the publication of the Green Paper, much more condign remedies were being mentioned.
The true reason for the change cannot have been the population assumptions. First, if his hagiographers are to be believed, in 1975 the Secretary of State warned about the affordability of the scheme in the long term and pointed out the ratio of retired to working people. Indeed, we knew then all the major assumptions of those who were in work to those who were retired. As the Secretary of State said, the retired population can be calculated, but what cannot be calculated, because someone born during this debate will be 50 years old before we reach the point of maximum strain on the insurance system, is what the working population will be.
The other factor to be taken into account in whether it is affordable is the relationship not with prices, as the right hon. Gentleman seems to pretend in his Green Paper, but between the rates of contribution and the cost to the retired population. It is precisely there that the right hon. Gentleman, who is so reticent in other regards, gives two figures, both of which are misleading.
First, he relates the cost of the scheme to prices and not to earnings,. and for good measure throws in a spurious earnings link that the Government have no intention of restoring. Secondly, he assumes for the future a rise in real earnings of 1·5 per cent. per annum. The average annual rise over the last 35 years has been 2·1 per cent. per annum. The difference between the assumption of the Government and the historical figure makes a great deal of difference to the contribution.
Let us examine both points. The present class 1 contribution in respect of pensions in 1984–85 is 12·5 per cent. On the assumption that 1·5 per cent. is the real growth, the percentage contribution in 2025 will have gone up from 12·5 per cent. to 14·7 per cent.—hardly a scheme-busting rise. If we assume a 2 per cent. growth

rate in real wages over the next 40 years, the class 1 contribution will rise by only 0·6 per cent. to 13·1 per cent.
Are my figures wrong? Do the Government challenge those calculations, or do they say that the increase will be such that future generations cannot afford it? The people who will lose on SERPS are fairly charted. Those who are forced into private pension schemes will not get anything like the same retirement pension as people in SERPS. They will get a 4 per cent. money purchase scheme. One can never hope to reproduce the same level of benefit with such a scheme, nor can there be any certainty in the scheme because a money purchase scheme is the product of how well or how badly the fund performs. People who need certainty in planning their retirement will never know what their income will be.
My hon. Friend the Member for Birkenhead (Mr. Field) talked about the way in which women will be affected disproportionately. But people in occupational pension schemes will also be adversely affected. They will have to pay towards national insurance 3·5 per cent. more than the 13 per cent. they are already paying, without any rise in benefit. They will no longer have inflation proofing of their guaranteed minimum pension after retirement. They will lose the benchmark for their scheme, that it must be at least as good as SERPS to be contracted out. Therefore, all comparability will be lost.
Most of all, there will be a strong temptation for employers to wind up schemes or to worsen the terms for existing contributors or for new entrants. Therefore, the whole pensionable population is threatened by the Government's proposal. Any Government, faced by that, would pause for thought. We know that the Government are doing this on ideological grounds and with the connivance, not of the pension funds, which have behaved honourably, but of some life assurance companies whose greed has known no bounds and whose selfishness to get a piece of the action is becoming an obscene feature of modern development.
When we obtained a consensus in 1975 it was a monument to the work of the late Brian O'Malley. His search for a consensus was much more honest, open and painstaking than that of the Secretary of State in his co-called consultation. The work of Brian O'Malley should not be in vain. We should resurrect this scheme, which would be a monument to his memory.

Mr. Roger Gale: May I first take up a point made by the hon. Member for Birkenhead (Mr. Field) about board and lodging payments? He and the Leader of the Opposition sought to give the impression that the reduction in board and lodging allowance for young people could lead again to male prostitution and crime. The Leader of the Opposition quite disgracefully sought to imply that that measure had somehow led to the suicide of an unfortunate young man in Edinburgh. My suspicion is that the right hon. Gentleman does not know the full circumstances of that case. Certainly he should not have used it.
Those who in the past have encouraged young people to move away from their homes into big cities, where there is neither accommodation nor often work available, are culpable, and not the Minister of State who has in a courageous measure sought to get to grips with the problem. It is also wrong to suggest that there are no


alternatives available to young people. My hon. Friend the Minister of State spelt out in a parliamentary answer only last week the alternatives. Funding under the non-householder allowance is available to young people and it is pitched at a level that is designed specifically to ensure that young people can still be accommodated in what used to be known as digs. It is more desirable that a young person should be accommodated in a family unit—not necessarily his own—than in the sort of field kitchens that some disreputable hotel proprietors have been operating recently.
The prospect of good hostel accommodation is also available to people in the 18 to 25 age bracket. So is accommodation in the private rented sector with support from housing benefit, if that is necessary. Those options are available and are all more attractive than the enticing young people away from their home areas to big cities. The impression that we are creating a nation of gypsies and compelling young people to move is wrong.
The hon. Member for Birkenhead is not lacking in courage — and never has been — in supporting a good idea when he sees it. When my hon. Friend the Member for Norfolk, North (Mr. Howell) expressed his belief, which I endorse entirely, that the introduction of a full programme of community work for the long-term unemployed offered the only real prospect of a long-term solution to some of our difficulties, I noted that the hon. Member for Birkenhead was nodding. I should like to take that a stage further, because it is important that the House recognises the implication in that kind of proposal. It is a consideration we should undertake. We must terminate unemployment benefit after one year and move to such a scheme, but the one is dependent on the other. Whether the hon. Member for Birkenhead is still nodding, I am not sure.

Mr. Frank Field: The point with which I was agreeing was Beveridge's point that the payment of benefit should be linked to a genuine search for a job. That is something we need to put back on the agenda and which we have moved away from in the last 20 years with the establishment of jobcentres and so on.

Mr. Gale: With respect, my impression is that the measures introduced by my hon. Friend the Minister of State to curb the payment of supplementary benefit willy-nilly were designed to do exactly that.
There are three points that I wish to cover briefly in connection with the Green Paper. First, in regard to support with rates, I endorse entirely my right hon. Friend's suggestion that we should go back to a system of accountability. It is wrong that people should be encouraged to vote, with no responsibility for the manner in which the money they are voting is spent.
The Green Paper contains a proposal — I hope that it is only for discussion — that a maximum of 80 per cent. rate support be provided while the ratepayer pays the remaining 20 per cent. That would give the ratepayer some responsibility. I suggested to my right hon. Friend that, following a review of the domestic rating system, there should be a scheme of nationally agreed rates. The amount would be paid in full by the Government for those receiving benefit. If the recipients of that benefit voted for a local authority and persuaded it to fix a rate which was lower than the national scale, they would not receive a bonus. If, however, they chose to vote for local

government expenditure above the nationally fixed level, they would have to pay the extra. A level of responsibility would therefore be fixed. It is an alternative to the proposal that my right hon. Friend outlined this afternoon, and I believe that it is worthy of consideration.
I agree entirely with my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) that the timing of the introduction of any such proposal is vital. I agree with him that it is ludicrous to consider introducing a benefit change and then to change the entire rating system and confuse the issue still further. The two measures should be introduced in tandem.
I wish to deal with disablement allowances. The Green Paper states that an in-depth survey on the needs of the disabled is being conducted. I hope that the result will provide an opportunity to consolidate the many and varied benefits that are available to the disabled and enable us to exercise the true Conservative principle of allowing disabled people, like everyone else, to choose how they spend their money. The social fund will not be an answer to that problem. A social fund will not work if it is cash limited.

Several Hon. Members: rose—

Mr. Gale: The enthusiasm of hon. Members is overwhelming. I said that I wished to make three points, and I believe that I have a couple of minutes left.
I notice that the discussion document says that the basic national insurance pension will remain unchanged. I believe that that unfortunately is a missed opportunity. The review provides the Government with an opportunity to introduce a basic pension that caters for living, transport and leisure needs. It will involve expenditure and we then have to decide how it will be funded. I agree with the right hon. Member for Plymouth, Devonport (Dr. Owen) that, as the contracted-out system was to be ended, a sum of money could be released for the retirement pension.
The Green Paper mentions the building up of additional benefits on the basic pension. It is wrong for some profligate councils to give transport passes to people who patently do not need them. The passes are given away by Socialist-controlled authorities, and lie unused in drawers, at a cost to the ratepayer. It is wrong that some pensioners should receive a 5p television licence because they live in one type of property, while others have to pay the full cost because they live in their own houses.
We must introduce a basic pension that understands and recognises the three needs of elderly people — living, transport and leisure. There is no reason why one person should be compelled to have a free television licence when he or she may not own a television and may prefer to use the money to go to the opera. I hope that those matters will be considered during the consultation process.
I welcome the proposals contained in what I believe is a far-sighted overview. The decisions taken now will ensure that our grandchildren will not be left with a legacy of bankruptcy, and they will meet the immediate requirements of those in genuine need.

Mr. D. E. Thomas: In 1966, national assistance was rechristened supplementary benefit. It appears that we shall be going through the same exercise in 1986. We shall rechristen supplementary benefit income support, and there will be a discretionary social fund.
It is clear that the reality of a means test is not changed for those people dependent upon such benefits. It is significant that the most important aspect of the supplementary benefit system is scarcely discussed in the Green Paper.
If we compare the Tory Government's 1980 reforms with the present proposals, we can see that the take-up issue figured in the 1980 objectives with the Government's desire for a simpler system, while the present reforms aim for clarity.
It is clear that the issue of take-up is now less important than fitting the social security system into the Government's overall public expenditure policies. It is important to remember that the latest estimates show that 30 per cent. of those people eligible for supplementary benefit do not claim it. That amounts to more than 1·25 million people. Between £760 million and £800 million of benefit is unclaimed. The so-called reforms contained in the present proposals will not tackle the crucial issue of take-up.
The change from supplementary benefit to an income support system wth premiums is unlikely, as the hon. Member for Thanet, North (Mr. Gale) said, to make a real change in the income levels of the beneficiaries.
The Green Paper contains theory but no facts. It is literacy without numeracy. Although the proposals for a premium for pensioners, the long-term sick, the disabled and families appear to provide a broad structure of support, that will not be the result. The structure will not change the income of those people dependent upon the scheme because of the level set for the benefits and the items that will be excluded from the income support. Those items will be swallowed by the catch-all social fund, which is to be cash limited, as the hon. Member for Thanet, North said.
Some anomalies are thrown up by the Green Paper. Premiums relate to client groups and not to regions. Water rates as a proportion of household expenditure are an important issue for Wales. They will be left out of the income support system. It is proposed to abolish the weekly additions. Some people receive as much as £20 in weekly additions. Those people will have to look to the social fund.
The new social fund will become a propping-up device, a new safety net and a catch-all for many people in need. The Green Paper proposes that we move from the appeals and accountability which have been a traditional and democratic part of the way in which clients have been treated under the social security system to a system which provides expert advice on budgeting.
The social fund, with its four elements of community care needs, which can be described as short-term, maternity and funeral expenses, budgeting arrangements and financial crises, will be a fund to which people will increasingly have to turn because of the low level of basic income support. It will not be possible to administer the fund coherently throughout the United Kingdom because of its being cash limited and because of the failure of accountability of the system between local offices.
We are all aware of the amount of pressure on local DHSS office staff. It would be difficult to get accurate information about how the social fund operated throughout the United Kingdom. It is unacceptable that the urgent

needs payments of the present system should be absorbed into the social fund and be determined by some budgetary expert.
I should like to consider a matter that worries members of and workers in social services departments. No doubt a link between the administration of the social fund locally, and the work of social services departments' section 1 money, and the work of voluntary bodies will emerge from the review of personal social services. We must ask what kind of local poor law institution the Government are reviving and consider how the family credit scheme is proposed as an alternative to family income supplement, with its 13-week proof of earnings and 26-week period of credit payment.
What will happen to the 27,000 family income supplement claimants who are self-employed? How will administration through employers work? We must consider the low-wage sector in which the scheme is supposed to operate and remember the Government's other proposals which attack the wage rates and living standards of low-paid people such as the abolition of wages councils.
If we consider how benefit will be paid, it is clearly a form of sexual discrimination as, unlike family income supplement, family credit will be paid mainly to the male breadwinner through the employer. What will happen if child benefit goes the same way?
I am also worried about the withdrawal of entitlement to free school meals. The Government have been unable to say that the value of those meals will be made up in the level of replacement benefit. This is the Government who undermined the nutritional standards of school kids by doing away with the minimum requirements for school meals imposed on local education authorities. This is another attack on living standards.
The Green Paper is a further attack on the basis of the welfare state system. Two great Welsh Members of Parliament established the British national insurance system—Lloyd George and James Griffiths. In 1935, the Welsh people rose up in a mass demonstration against real cuts in unemployment benefit. I warn the House that, if the Government push these proposals through, there will be a similar uprising next year.

Mr. David Heathcoat-Amory: I congratulate my right hon. Friend and his colleagues on the Green Paper. On the whole, it is well written and an honest attempt to redirect the system, which is obviously and demonstrably failing in several important respects.
The final product is a good deal more impressive than the manner of its birth. The leaks and counter-leaks earlier in the year were unedifying. It is always disappointing when it is clear that newspaper editors are better informed than hon. Members about Government thinking. That is the past, however, and the pension proposals of the Green Paper are persuasive.
Much has been made of the fact that the predictions in the Green Paper are open to question. They are estimates, as they must always be, because who can predict future growth rates, birth rates, death rates and the rest? That is another reason for not guaranteeing high and inflation-proof pensions well into the next century, regardless of how the economy performs in the intervening years.
If the predictions and assumptions in the Green Paper turn out to be pessimistic, it will be open to future Governments to increase the basic pension. As I represent


a great many old-age pensioners, I hope that it will be possible in time to release more resources to them. That is a better mechanism than locking ourselves into SERPS now, which would be impossible to disentangle.
I ask alliance spokesmen to make their attitude to pension increases clear now. In the debate on the elderly on 6 June it seemed to be Liberal policy to increase the basic pension now. If that were done, taxes and national insurance contributions would have to rise, and that would accentuate the poverty traps which we all agree are an unacceptable feature of the present system.
Under assumptions in the Green Paper, even if the basic pension is maintained in real terms, the cost overall will increase by about 40 per cent. in the next 50 years. If it is alliance policy to promise to increase the basic pension some time in the future, will it not therefore pass on to the next generation a similar and unsupportable obligation on basic pensions instead of SERPS? I hope that alliance spokesmen will address themselves to that and give us some figures. They have been critical of the lack of figures in the Green Paper, so we should have some from them.
As for housing benefit, I should like to re-emphasise the importance of every householder making some contribution towards the rates. I hope that we continue to use rates as a means of financing at any rate the non-educational expenditure of local authorities. If that is to be done, the rating system must be reformed and the rate base must be broadened.
The Green Paper proposes that everyone should pay at least 20 per cent. of the rates. My hon. Friend the Member for Thanet, North (Mr. Gale) had an ingenious formula, but I would prefer everybody on full housing benefit to receive a basic lump sum and only 50 per cent. of any excess, leaving the other 50 per cent. to be paid for by the householder. For about the same expenditure, that would give people a more lively interest in what happens to their rates and whether they are increased.
My more serious and fundamental criticism of the Green Paper is that it is timid and misses an opportunity. This might be our last chance fully to integrate the tax and social security systems. The Green Paper says rather coyly that the matter will be discussed further in a future Green Paper on personal taxation, which is to be published later in the year. That is not good enough, and I am not bought off by the assurance that the two systems will be coordinated better in future.
Once again we are being drawn into discussing two separate systems in isolation when we should be discussing the future of one integrated system. The moves towards simplification in the Green Paper are in the right direction and ought to be welcomed, although any move towards simplification must entail an element of rough justice.
The present system attempts to deal with individuals case by case. It is supposed to put the money where it is needed, but we know that the system does not work. There is plenty of evidence to show that people who do not deserve money are getting it, whereas others who need it do not receive it. Anyone who has seen the supplementary rules will know what I am talking about. The regulations are longer than the Bible, and not as well written. It is not enough to streamline and prune the regulations. At the end of the day what matters is whether an individual receives money from the state or pays money to the state. The income tax system is as much a part of that as the social security system.
The family credit system outlined in the Green Paper is on the right lines. It is based on logical principles and will be paid through the wage packet or salary cheque. I do not find it a serious objection that family credit will be received by the family breadwinner, and not always by the mother. I know that that worries Opposition Members, but the distribution of money within a family is a matter for husband and wife, not the state. It is a clumsy way of enforcing the redistribution of money from husband to wife, to tax the husband, churn the money through the Inland Revenue, the Treasury, the Department of Health and Social Security and the Post Office, and to pay it into a mother's purse.
Having set out what I regard as the right payment system, the Green Paper reform stops halfway. The DHSS will still administer family credit. As this is a structural review, that is a structure which should be altered. The tax system provides the best way of assessing eligibility for benefits because information is already held there. A tax return or an income tax coding is a means test. When Opposition Members refer to means tests, it is as though they are talking about a Victorian rite, and a way of stopping Oliver Twist from getting his bowl of soup, yet when they fill out a tax return, they are undergoing a means test. That information could and should be used to determine whether an individual is eligible for benefit, either in cash or through tax relief. Instead, the Green Paper regrettably proposes that we should continue with two separate systems, even if better co-ordinated.
The most striking mistake, which is a consequence of that failure, is that we are to continue with child benefit as an indiscriminate subsidy to rich and poor alike. The cost of child benefit this year is more than £4 billion, which is more than the housing budget. Why should wealthy mothers continue to receive what to them is mere pocket money? They pay for it through their taxes and then receive it after it has been churned around the system. The Green Paper fudges that issue. Child benefit in its present form must be abolished or merged with family credit, or has child benefit become one of those well-loved anomalies of British life, to which the Chancellor of the Exchquer referred in his Budget statement? If so, it is expensive and equivalent to 4p on the standard rate of income tax.
Child benefit and family benefits should be assessed and administered by one system, using one source of information, making one benefit calculation and leading to one payment. We should have a spectrum that extends from cash benefits being paid to the badly off, through tax reliefs to those who pay tax, to nothing for those whose income is above a certain level.

Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman should have concluded his speech.

Mr. Robert N. Wareing: When I heard the Secretary of State introducing his Green Paper, I said that it was a kick in the teeth for disabled people. The Secretary of State expressed his dislike at what I had to say and waved in front of me the prospect of the special premium rate for the disabled. On further study of the so-called reform of social security, I am convinced that the sum result of the review for disabled people will be to undermine their already low standard of living. They will be under attack in three ways.
Disabled people will come under attack in terms of additional payments of supplementary benefit, the abolition of the state earnings-related pension scheme and the reduction in housing benefit. The most severe of those attacks is probably the proposal to sweep away the legal entitlement of disabled people to the vital additional payments which they now receive as of right. Because of the absence of a comprehensive disability income and the inadequacy of existing invalidity pensions, disabled people are forced on to supplementary benefit. Although that may be deplorable, under the present supplementary benefit system additional payments are available to meet special needs.
I endorse what my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) said about the special needs of disabled people for extra heating. People who are confined to a wheelchair or to bed require a special allowance for heating. In many cases the chronically sick and disabled require a special diet, for which there is no concession, and allowances, which are at present on offer from the Department of Health and Social Security. Many of them are incontinent and require money to cover the extra costs of laundry services. Many people rely on their families, but those without a family gathered around them require the assistance of a domestic help.
In 1982, 62 per cent. of all claimants received an additional allowance, and 87 per cent. received £7 or more a week. The Disablement Income Group has shown that in many cases—this is well documented—20 to 30 per cent. of benefits are paid out in additional allowances. In many cases the amounts are between £15 and £20 a week. The general secretary of DIG, Pauline Thompson, stated that if the proposed special premium, of which the Secretary of State seems so proud, is to be paid to disabled people, it will have to be at least £16 a week above the present £57·10 a week supplementary benefit level for a couple, if they are not to suffer a loss of income.
So far, as in many other cases in the review, the Secretary of State has produced no figures. Disabled people are entitled to know what they will receive. I challenge the Secretary of State to tell us whether the figure of £16 that DIG mentioned will be met under the special premium, which is to maintain the standard of living of disabled people.
In 1982, 1·5 million people claimed single payments averaging £54 a week. Those payments are to be swept away. Some 3·5 million claimed weekly additional allowances — that is, 90 per cent. of supplementary pensioners. Those allowances are to be swept away. The abolition of additional allowances is all to save a relatively measly £670 million. The aim of the exercise is cost-cutting, not cost-effectiveness.
What are the Government's proposals on payments for domestic help, which is so often required by those who are sick and handicapped? The allowance for a live-in domestic help can now reach £44·90 a week. What is to happen to that under this proposal? How is the special premium to take that into account? We want more details and figures to explain that. When my party returns to power after the next election—that becomes more of a certainty because of the proposals that we are now discussing—I hope that we shall endorse a comprehensive disability income for all disabled people. Disabled people, who are often disabled all their lives, should not

be catered for merely by a supplementary benefit system or a special premium income support system that is thought sufficient for those whose needs may be temporary because they are unemployed, or for some other reason.
The abolition of SERPS will hit disabled people; 800,000 disabled people who are on invalidity benefit cannot buy into private pension schemes. How ludicrous it is that they should be faced with the prospect of appealing to a private insurance company. Is it not known that insurance companies regard the chronically sick as bad risks? What is in it for them after the year 2000? If the proposal becomes law, young disabled people have the dismal prospect, not of a welfare state, but of a workhouse state in the very near future.
Of the 800,000 disabled people who are on invalidity benefit, only 120,000 are in receipt of supplementary benefit, so many of the remainder are dependent on housing benefit. Many disabled people who work are often in low-paid jobs. For them, housing benefit is crucial, but under the proposed scheme no one will get a 100 per cent. rate rebate; 20 per cent. of rates will have to be paid by everybody. That is indeed a redistribution of income, but it is not a redistribution from the rich to the poor; it is a redistribution from one section of the poor to another. Far from likening the system to Beveridge, one could liken it to Scrooge when he said, "Are there no workhouses?"
There is no doubt that under this Government disabled people have lost on several occasions. This is not the first. They lost when the supplementary benefit scheme was simplified in 1980. They lost when the available scale margin was extended to heating allowances and increased at the same time from 50p to £1. In many cases they lost when the severe disablement allowance was introduced to take the place of the non-contributory invalidity pension. They lost when optical services were withdrawn from the National Health Service.
Those who advise the Government are not the people who are now writing to us to advise us against their policies. They are not the disability organisations, not those who will inundate us with correspondence in the near future. I hope that those people will not only push at the open doors of Opposition Members, but will inundate Tory Members, particularly the one-term Members whose stay in the House is now probably limited to a year or two.
The Conservatives should be challenged on the cash limits for the social fund. Under this Government, there are cash limits for the social fund to aid poor and disabled people, but there are no cash limits when it comes to Trident or satisfying the greed of the NATO generals. I would never discredit the Government by saying that they have failed, because I have said on previous occasions in other debates that they intend to recreate the old Victorian society, and to keep the poor, disabled and handicapped in their place.
Therefore, there is not much consolation in the Green Paper for anybody who is in want. There is not much consolation beyond the fact that the measures will bring about the inevitable demise of this Tory Government. The Green Paper is probably the last nail in the Tory Government's coffin. I believe that more and more people will come to understand—

Mr. Peter Griffiths: On a point of order, Mr. Deputy Speaker. Am I not right in believing that Mr. Speaker changed the time for 10-minute speeches from 6 pm until


8 pm to 7 pm until 9 pm? If so, the hon. Member for Liverpool, West Derby (Mr. Wareing) is out of order in continuing his speech.

Mr. Deputy Speaker Sir Paul Dean: I am grateful to the hon. Gentleman. I had not realised that. In that case, the hon. Member for Liverpool, West Derby, (Mr. Wareing) must finish his speech with one more sentence.

Mr. Wareing: I am sorry, Mr. Deputy Speaker. I do not think that I have had 10 minutes.
The one sentence is this. I hope that there might just be enough Tories with guts tonight to go into the Division Lobby with us in advance of the letters that they will receive, which will tell them what ordinary people think of the way in which they are being treated compared with the Tories' rich friends in the stockbroker belt who will benefit from the massive reductions in taxes which they have been promised but which the Chancellor of the Exchequer is finding it difficult to deliver.

Mr. Roy Galley: It is a pity that the Labour party has decided to debunk the whole of the Green Paper in advance of reading it. Labour Members wrote their scripts in advance of the Green Paper coming out, and now they have decided to debunk it. In doing so, they are in great danger of throwing out several healthy babies with what they regard as rather murky bath water.
There is one point which I should like to urge on my right hon. Friend the Secretary of State, and which has been made strongly. We should have some indicative figures earlier that November. I say that not because I regard that as sound management. It is obviously sound that we should discuss principles, consult and then establish rates. However, I am concerned that the hysterical reaction of the Left that we are seeing in the debate and in the country will cause considerable mischief primarily for the most vulnerable and needy in our society, who will be needlessly frightened by the exaggerated tales that are already coming from the Opposition. I beg my right hon. Friend to take that factor into account when he issues the figures.
Opposition Members claim to care about the vulnerable in our society, but in fact they regard them simply as pawns in their power game. Surely everyone will welcome the intention in the Green Paper to remove the unemployment trap and, as far as possible—it may not be entirely achieved—to ensure that people in work are not disadvantaged compared with those out of work. The anticipated reduction of 100 per cent. in marginal tax rates is crucial. Even if the price that we have to pay is that more people will have a marginal tax rate of 90 per cent. or more, it is an improvement on the present 100 per cent. marginal tax rates, with which we must deal. One hopes that one will minimise the 90 per cent. rate, but it will be a vast improvement.
The family credit scheme based on take-home pay calculated by the employer is also potentially a vast improvement, in that it will target money on those in greatest need. The critical problem, as ever, will be that of take-up. It is not axiomatic that a six-monthly application system, a 13-week income assessment system and employers making the payment in the pay packet will necessarily improve the take-up. One hopes that it will do so, but it will not necessarily of itself do so. There will

need to be a substantial marketing effort and a positive, active role by employers in encouraging their employees to take up the benefit.
If we are to deal effectively with family poverty, we need a high take-up rate of family credit. We will need additional resources to achieve that. From where will the resources come? They could come from other parts of the package, but if that is the intention, the resources will be tight.
I wish to give considerable support to the plea made by my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on child benefit. It is becoming a popular plea from these Benches that those who are rich should not automatically be entitled to child benefit. Unless we have a system of taxing child benefit, or having an income cutoff point, we will not produce the resources to make family credit an adequate response to our family poverty problem.
I doubt that we will solve the problem of family poverty unless we have a partial tax benefit integrated system with family credit, child benefit and tax brought into the same system as a first step. All the signs are that we can do that fairly soon, so let us get on with it as soon as possible.
There is silence in the Green Paper on whether the credit will apply to the self-employed. It is vital that it should do so, because there are low-earning self-employed people, many of them starting new businesses, who need help and encouragement. We need to know how the system will work for them.
The family credit proposals include the highly commendable principle that people should be given cash in their hands, not benefits in kind, so that they can decide how to spend it. Already the hysterical Left is claiming that free school meals will be abolished, rather than applauding the fact that we will be giving people money and the dignity and independence to decide how to spend it.
So often it has been claimed that a great deal of stigma attaches to benefits in kind, such as free school meals. The issue is greatly exaggerated, but for some people there is an element of stigma. If we have the opportunity to abandon that, let us do so. If the argument can be applied to family credit, why is it not logical to extend it to those on income support? Surely the most potent argument for the retention of free school meals must be the variation in payment from one area of the country to another. If it is accepted that we can achieve an appropriate addition to family credit, why cannot that addition be added to the child rate for income support, so that we can go further along the road of abolishing the ludicrous benefits in kind?
The whole principle of income support with circumstantial premiums is to be commended. It will target benefit on those in greatest need. When deciding on the premiums and the rates, I ask my right hon. Friend to bear in mind the poverty often found in single households, especially among pensioners. I suspect that, after families with children, that is the greatest area of poverty. We must take that into account in setting income support levels.
I wish to raise three points relating to income support. For the first time, the Green Paper has established the presence test for income support, which is to be commended. It is quite right that foreigners, of whatever origin, should not be allowed to enter this country and immediately claim benefit. The reality may not be as substantial as the inclusion of the presence test suggests since primary immigration is virtually at an end, so there


may not be too great a difficulty. The only problem is what to do about political refugees. Will they be paid from money in the social fund?
The capital rule change for income support will be widely welcomed. The £3,000 cut-off has been a source of resentment to many people for a long time. In carrying out this reform I hope that my right hon. Friend will also take the opportunity to align the rules for charges for local authority and private homes with the changes. At present there are anomalies and there is an incentive for old people with capital of between £1,200 and £3,000 to enter a private home, while there is an incentive for those with capital over £3,000 to enter a local authority home. I hope that that anomaly will be tackled when the new changes are introduced.
The easing of the earnings rules and the disregard rules will also be welcomed, but I wonder whether we could be a little more generous in the disregard rules, especially for overlapping benefits. There are many groups for whom the disregard rules mean the loss of all the £4 of their secondary benefit. For example, I especially wish to mention the war disabled on supplementary benefit, which is their only source of income. They are currently losing substantially.
There are many gems in the Green Paper which have not been given sufficient attention this evening. I commend much of it to the House.

Mr. Gordon Brown: What we are debating tonight is a review that the Government call the most fundamental reform of the welfare state for 40 years. It is a review from the consequence of which they admit almost no family or household will be spared. It is a review about which the electorate was not warned, about which details are still denied, to which additional weekly cuts —such as in child benefit—are added and from which advisers are daily deserting the Government, having sat on the review teams.
Quite simply, the Government have had to impose the review because the economy that they are running can no longer meet the standards necessary for a civilised and decent society. The review displays principles of simplification, targeting and partnership only as a pretext for what has become clear as penny-pinching and piecemeal cuts in provision for ordinary people.
With £500 million cuts in housing benefit already announced, with almost 4 million pensioners affected as a result, how can the Government say that to simplify is just not another shorthand for cutting? When the Secretary of State had to admit on "A Week in Politics" 10 days ago that the housing benefit cuts were only the major savings of this review, and when we know that £200 million is to be saved in child benefit, how can he maintain that this is a nil cost review? We know that the right to a death or maternity grant is to be abolished, that single payments to more than 1 million households are to be abandoned, that heating additions to more than 2 million households are to be abandoned, and that in their place all we will get is citizens claiming or begging from a social fund with no rules, regulations or right of appeal. How can Conservative Members, even with their new-found interest in philosophy and structures, tell us that the philosophy of targeting presented in the review is not

simply the proliferation of more means testing, linking shame to need, even at birth and even, in some cases, for people beyond death?
How can the theorists of the new Right tell us that cutting benefits for the unemployed under-25s by perhaps £5 a week, and then asking them to pay £2 a week in rates —at a time when we know that, for example, in my constituency there is only one vacancy for every 30 people seeking work, which is true for most constituencies—is fostering work incentives when all that they are doing is penalising the unemployed?
I have a question for Conservative Members who applauded the Secretary of State two weeks ago and who have been laughing tonight as my hon. Friends and I have been explaining some of the facts and figures about the reviews. They cannot blame the Government's recommendations on expert advisers, because those advisers do not submit to the review conclusions. Nor can they blame the review recommendations on their manifesto, because the proposals were not in it. They cannot even blame the state of the economy for the proposed cuts, because they say that we are in the fourth year of sustained growth.
I ask them what they intend to say to their constituents to justify the plight of a pensioner on £35·80 a week who was promised protection by the Conservatives but who is now to be penalised for his or her thrift, who will be deprived of perhaps all help with rates because that pensioner saved up and has a small occupational pension worth, say, £10 or £15 a week?
What excuse can Conservative Members give to the young unemployed for cutting their benefit, when the Secretary of State for Social Services said just prior to the last general election that cutting unemployment benefit was an unacceptable price to pay? They are now, however, likely to be worse off to the tune of £7 a week as a result of the reviews.
What explanation will Conservative Members give to the widow whose allowance of £50 a week paid over six months is to be consolidated into a smaller, one-off benefit of £1,000, remembering that many widows, particularly those who are childless, will lose hundreds of pounds as a result of the changes?
What justification will they give to pensioners who will be deprived of their heating addition? What will they say to the 7 million mothers who will be deprived of a rising level of child benefit and even of the right to maternity benefit?
The Secretary of State has compared himself with Beveridge. The Leader of the House said of the right hon. Gentleman that his reforms would stand alongside those of Beveridge and Lloyd George. The test which the Secretary of State asks us to apply to his proposals is the test of a Beveridge report which commanded national consensus.
Where does the review, in its many aspects, raise its horizons to those of Beveridge? Where does it refer to the giant evils of poverty, want and idleness which concerned Beveridge? Where does it refer to the present worsening poverty that would have challenged Beveridge? Where does it refer to the inadequacy of benefit levels which would have enraged Beveridge? Where does it refer to the need for the redistribution of wealth, from rich to poor, instead of the redistribution of poverty, as the review proposes, among the poor?
We are looking for a vision to deal with the giant evils of want, idleness and poverty. All we find is an obsessive, compulsive concern about the burden on taxpayers, about costs and about cuts.
What the Government propose is not designed to meet the social challenges of the future. It is designed to deal with the chaos of economic failures on the part of the Government. The test for the Chancellor in the reviews is not a reduction in poverty but a reduction in the public sector borrowing requirement.
Under the SERPS proposals, it is suggested that the growth rate of the economy in 40 years' time will be half what it is now. In other words it will be less than it has been under almost every Government since the last war. The truth that emerges about the Government's policies is that we have a third-rate welfare state for a second-rate economy.
The Government should know that the British people are concerned more with poverty, are less selfish and are less self-centred than the M3-obsessed faction who are now ruling over the nation. They should know that the British people do not regard the welfare state as a luxury but as a lifeline. They do not see it as a sort of optional extra to be discarded at the whim of the Government. They see it as an essential component of a decent, modern society.
The Labour party believes in the welfare state. The country believes in it. The Government are isolated in their proposals to cut benefits, to penalise the unemployed and to introduce new means tests into our society.

Mr. Robin Squire: Most Back Benchers — rightly, considering that we are debating a Green Paper — have concentrated on making constructive suggestions. It is all the more to be regretted, therefore, that the opening speech by the Leader of the Opposition was a 45-minute Second Reading rant, and he lost a great opportunity to express some of his views.
I congratulate the Government, as other hon. Members have done, on the prodigious amount of work that has been involved in the reviews. I welcome a number of the proposals, though I shall, like other hon. Members, concentrate on those things with which I do not agree.
I wish at the outset to put the alternative argument on child benefit, and I do so because I have for long believed, as my right hon. Friend the Minister knows, that until and unless we have a proper, working, operational, combined benefit and tax system, it is folly in the extreme to do away with the most effective means of reaching out to poor families. Literally dozens of reports sustain me in that view, and I need quote from only one. That is the Policy Studies Institute report, which is well respected and which states:
PSI research … clearly identified hardship experienced by out of work families with children, and leads to the suggestion that increased rates for children should be the number one priority for social security … In fact the overwhelming majority of families in receipt of child benefit are tax-payers; the most efficient mechanism for targeted tax relief is child benefit. An increase in this could be counted as a tax credit to avoid an apparent effect on public expenditure. The resources are available from a demonstrably less well-targeted form of family tax relief, the married man's tax allowance.
My hon. Friends the Members for Wells (Mr. Heathcoat-Amory) and for Halifax (Mr. Galley) and others who have not yet spoken should accept that if we are to launch into

an attack on all-embracing universal benefits, we should consider that one and, even more obviously, mortgage tax interest, before we start tackling a benefit that goes to the very heart of support for the family.
I come to supplementary benefit, or income support, as we may have to learn to call it. I welcome without reservation the simplification proposed in the Green Paper. Few, if any, hon. Members can doubt that the present complexity of the scheme prevents many people—who justly and rightly should be receiving it—from getting this benefit.
I hope that the House will forgive me for dealing with an instance of the consequences of removing all special single payments. I quote from a letter that I have received from the Newham neighbourhood energy project, a voluntary project which I know well and which does a great deal to assist low-income and elderly people with their heating. The letter states:
Dear Mr. Squire,
I wrote to you in March regarding the possible cessation of 'single payment' provisions for draught-proofing under the review which the Government were then carrying out. As now announced, this provision is being dropped and there appears to be no replacement provision under the proposals published in the Green Paper. This is devastating news to our potential clients and to the 170-odd staff whom we employ on these projects, sponsored by the Manpower Services Commission. A substantial number of our elderly, sick, disabled and low income clients rely on this single payment provision to cover the costs of the draught-proofing materials which we install … Over 40 per cent. of the long-term unemployed whom we recruit subsequently find full-time permanent work. The removal of the single payment provision will seriously affect the numbers whom we can potentially assist and will have a detrimental effect on our provision of jobs for those who most need them. Yet, nationally, we are talking about very modest sums. If every one of the 4 million currently qualifying for single payments were to have their homes draught-proofed to an efficient and effective level, the cost would be less than £100 million and the energy savings alone would recover this sum in less than two years —disregarding the qualitative benefits of warmer homes and greater comfort. 1986 has been designated 'Energy Efficiency Year,' yet one of the main-stays of the service which we provide is now under threat.
I do not expect the Minister, when summing up tonight, to give me a detailed answer to that, but I trust that he will look into it and contact me in due course. If that were a consequence of the change, I and many other hon. Members would regret it.
Having called for some time for a simplification of what is universally accepted as a hopelessly complex system of housing benefits, I thought that all others would, like me, welcome what is proposed. I am surprised, therefore, that some hon. Members have not agreed on that. Wherever the blame for the present system lies, it is self-evident that any scheme that involves the DHSS and local authorities in interminable negotiation must need major reform, such as that outlined in the Green Paper.
Other hon. Members, including my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) have pointed out the consequences of moving from six tapers to one. Ultimately, that is a political judgment which the Government and the House will take. If we combine the housing benefit for both rent and rates, there will be substantial losses of £3 or £4 a week for those receiving benefit. Often these people are the elderly. I am sure that my hon. Friend the Minister of State will take that aspect into account.
I urge the Government to continue to listen to the various experts. Of course, political decisions must


properly lie with the Government, but I urge the Government to listen to the experts when considering the mechanics of the benefits to be implemented. Many warnings have been given by groups such as the Child Poverty Action Group, the Shelter Housing Aid Centre and Shelter before the introduction of the housing benefits system. It is incumbent upon us to listen to the warnings from people who say, "If you implement the system, it will be chaotic and haphazard."
I turn to the general principles that permeate each of the benefits. It is easy for hon. Members, especially Conservative Members, to welcome the improved targeting of benefits towards those most in need. I would be the first to say that, where that can be done, it must be done. The benefits are obvious. A balance must, however, be struck. Time and again in the Green Paper we see that the consequence of making that targeting the only standard would be unacceptably high marginal rates of income tax. We must be consistent. The Government rightly deplore any suggestion of again imposing income tax at the lunatic levels of 80 per cent., 90 per cent. or even 95 per cent. We must continue to point out the danger that that would cause if an alternative Government pledged that they would introduce that system.
If we are consistent, we must recognise the disincentives of such taxation levels being imposed on people with a fraction of the resources of the people to whom I have referred. If part of the cost of making the slope of benefit withdrawal more gentle is regarded as a direct contribution to a reduction in the marginal income tax rate, that is money well spent. It is important to make that point rather than to believe, with all our experience of means-tested benefits, that an abrupt termination of any benefit would do anything other than keep many people in a poverty or unemployment trap. I know that all hon. Members want those traps to be removed.
As I wished to demonstrate that I can speak in less than 10 minutes, Mr. Deputy Speaker, I am happy to give a fulsome welcome to the Green Paper. I look forward to the discussions continuing beyond this evening.

Ms. Jo Richardson: I hope that the hon. Member for Hornchurch (Mr. Squire) will forgive me if I do not follow his last argument, but I have only a few minutes in which to speak.
An underlying theme of the Green Paper worries me greatly. Apart from the individual measures proposed, their merits and demerits and the review's poor law approach, I am worried about the underlying assumption that women are the dependants of their husbands. I deplore that. For some time we have been trying to move away from that concept. Although the state believes that women are dependants of their partners, that view is becoming increasingly less acceptable to women, especially the 40 per cent. of the work force who are women and the 1·25 million women who are the main breadwinners in their families. In spite of that trend, many of the proposals in the Green Paper take us backwards and encourage a more Victorian and outdated approach.
The ending of the state earnings-related pension scheme, which puts the onus on the individual to organise an individual pension on top of the basic state pension, will be disastrous for women, because they are already in a

dependent and unequal position. The present system does not provide equal pension rights, but at least it gives women some protection. Many women will not be able to organise themselves to have an additional pension. They will be subjected to the new high street cowboys, who will try to sell them a cheap pension which will appear attractive but which may prove not to be so. They will be landed with an inadequate pension. This applies to many groups, including the low-paid and women.
Women who do not work will be dependent upon their husbands' schemes, which may not always be adequate. Widows will suffer if no scheme is organised or if the scheme is discriminatory or inadequate. The proposals hit a vulnerable section of our community who are at the bottom end of the pay scale.
It is proposed to abolish family income supplement and to replace it with the family credit scheme. This will involve payment through the wage packet rather than through the Post Office. Free school meals and welfare foods will go in favour of a possible increase in benefit. I say "possible" increase because no one has quantified what will happen. In the majority of cases, payment of family credit will be made through the male wage packet. The woman in the family will have no guarantee unless she and her husband have a good and shared relationship. She is in charge of the family income and has to budget, yet under this system she could be much worse off.
There is no guarantee that family credit will reach the woman's purse. Removal of the safety net benefits, such as free school meals and welfare foods and the payment of money through family credit, may mean that the woman will not receive the resources. This is a reversal of the concept of redistributing resources within the family and will mean an increase in the number of women who are seen as dependents of their partners.
Whatever the age groups or the circumstances, the Government are hitting women. The Government do not even protect women during pregnancy, which is a vulnerable time. For a long time I have campaigned for maternity grant to be increased. It is abysmally low. It is no good telling me that the flat rate, means-tested benefit of £75 paid from the social fund to replace the concept of a universal maternity grant and single payments for baby clothes are improvements. We shall lose the principle of the maternity benefit, which is a precious principle on which we should build. We are saying that women will have to go with hand outstretched to the social fund to obtain money for their children.
Next week the DHSS will go to the other place on appeal against the judgment in the case of Mrs. Gillick, who wants to ban the giving of contraceptive advice to girls under 16 years. As a result, there may be more pregnant girls under 16, yet the Government propose in the review to cut off maternity benefits to schoolgirls. That is a disgrace. This is a vulnerable group of people who have made mistakes, but who should be protected.
As far as can be calculated from the maternity allowance, half a million women will lose the maternity grant, and women on income support may get less than they receive from the single payment, plus the maternity grant. Expectant mothers, who might have expected the review positively to update the benefits to which they are entitled, will not benefit from it.
The abolition of the death grant will affect the elderly, a large proportion of whom are women. The death grant will be discretionary and I understand that it could be


repayable. Why is this extra worry being heaped upon the bereaved? The Government believe that they are being generous by abolishing the weekly widow's allowance and replacing it with a lump sum payment, but most of the £1,000 will be spent upon burial expenses and resettling the widow in new circumstances.
The Government had a golden opportunity to provide women with greater equality and financial independence, instead of which they are thumping women. The Government thump girls when they are at school and might get pregnant; when they grow up, get married and try to set up home and start a family; when they try to make ends meet on a low family income; when they work and try to provide for their retirement; when they retire and also when they are bereaved. If a woman is beaten up by a violent and uncontrollable husband, that is called domestic violence. I call this Government violence, and the sooner we get rid of it the better.

Mr. Edward Leigh: The principal reaction to the Green Paper, which I share, has been one of homage to the political skills of my right hon. Friend the Secretary of State for Social Services in avoiding the numerous banana skins that lie in the path of any Conservative politician who proposes the modernisation of the welfare state. The avoidance of banana skins, however, is not a sufficient guide to statesmanship. True, one does not fall over if one does not stride purposefully forward, but one does not achieve very much either, apart from being remembered for shrewdly defending one's corner. For however much the Labour party may attempt publicly to adhere to the sacred shibboleths of "welfarestate-speak", every independent commentator has come to accept in recent years the need not just for a review of the welfare state but for a radical reform, not merely to improve the old ways but to change direction altogether.
It would be unfair to describe my right hon. Friend's review as mere patching of a rotting edifice. He has planted the seeds of an exciting new structure, but they still lie buried very deep. In these seeds I hope we see the beginning of the end of the contributory principle, long since dying in fact if not in sentiment, the end of the principle of universality and the beginning of negative income tax and the integration of the tax and benefit systems. We see that in the new family credit.
But why is a new start needed? It is needed because Lord Beveridge in his wildest dreams could not have conceived his creation developing into a bureaucratic monster employing 70,000 people administering 43 different means-tested benefits, costing £40 billion and now £42 billion a year—more than we spend on defence and health combined—and allowing, according to the Daily Mail, so it must be right, middle-class Italian students the privilege of free holidays in Great Britain.
Three weeks before this year's Budget I was lucky enough to come top of the ballot for private Members' motions and I chose as my subject for debate the need for the integration of benefits and taxation. I like to think that that motion was a provocative thrust against the Treasury mandarins who, it is becoming increasingly clear, are determined to adhere to the outdated principle that we are two nations: a nation of thrifty workers paying taxes, and a nation of the poor, the elderly, the disabled and the unemployed gratefully receiving the fruits of the nation's labour in benefits.
To the Treasury mandarins the glory of PAYE stands as a monument to their ingenuity: pure, intellectually whole and satisfying but quite separate from the messy jumble of those 43 means-tested benefits. Alas, the truth is very different. All of us — I apologise for vulgar language—have our noses in the trough of state support.
The most infamous example is that of child benefits. This afternoon, in questions to my right hon. Friend the Secretary of State for Social Services, I asked him what rational justification there is for taxing struggling young families on low incomes into the poverty trap in order to subsidise the child bearing of a duchess. "Ah," said my right hon. Friend, if I may paraphrase him, as he desperately searched for an answer which would not smack of political opportunism, "child bearing carries particular costs and responsibilities for the duchess as for everyone else." Granted; but why make her pay crippling income and capital taxes on the one hand and give her a benefit that she does not need on the other? Do we really think that the higher income classes of this country are such dolts that they enjoy the state deciding for them what crumbs they shall be offered in return for the taxes that they pay in order to subsidise the monstrous leviathan of an out-of-control bureaucracy spending £40 billion a year?
But child benefit is only one perk that we all enjoy from the state, however well off and successful we are. Old-age pensions, mortgage tax relief, free health care, and income tax thresholds are all there. The Treasury mandarins are wrong. The walls of their castle have long since been breached by middle-class voters who would rather enjoy a perk now than look forward to the chimers of tax cuts.
However, my right hon. Friend's success in his Green Paper has been to start a move towards the reluctant acceptance by us all that the apparatus which aims to mix up contributory and non-contributory benefits and universal benefits for the well-off and the hard-up alike cannot survive. It is not fair; we cannot afford it. It does not adequately target help to those most in need. We must choose between a whittled-down Beveridge concept based on the state paying the premiums of those unable to contribute and a fully integrated tax and benefit system. To choose the former way is to suffer under the continuous and effective, if outrageous, arrows of the onslaught of the unprincipled thrust of Opposition argument as perk by perk, benefit by benefit is salami-sliced away. We all receive those benefits in one way or another.
The latter approach is difficult, expensive and radical, but it has one virtue—it is right, rational and feasible and it will make it politically possible and acceptable to remove child benefit from the well-off and to give it to the hard-up. To that extent I welcome the Green Paper, but only as a first step on a long path, not as a final settlement.

Mr. John Hume: I am grateful for the opportunity to take part in the debate, as I believe that my constituency has a higher rate of dependence on social security than any other represented in this House. There is 40 per cent. unemployment in Strabane and 30 per cent. in Derry, and 21,000 of the 60,000 people on the electoral register in my constituency are supplementary benefit claimants, so I can perhaps claim more direct experience than right hon. and hon. Members on the Conservative Benches of the effects of social security arrangements.
Many of the people who come to my office are trapped between monetarism and terrorism. The Government's


neutron bomb economics has left workplaces standing but taken the people out of them. The terror bomb tactics of the IRA have destroyed the workplaces and left the people standing — on the dole queue. One closes down workplaces as uneconomic targets while the other blows them up as economic targets. One uses unemployment as a tool of economic strategy while the other uses it as a tool of political strategy, and we all know who pays the price —the people who end up on social security.
Government and Opposition seem to be agreed on only one claim—that the proposals in the Green Paper will have far-reaching effects. No matter how far-reaching the effects on Great Britain, the effects in Northern Ireland will be especially pronounced because social security payments represent about 26 per cent. of household income in Northern Ireland compared with about 13 per cent. in the United Kingdom as a whole. If the Green Paper is implemented, it will have a profound effect on the lives and living standards of many people in the north of Ireland, not just the unemployed and the elderly but many people at work, because social security payments account for one quarter of the spending power in the Northern Ireland economy.
Few would dispute that our social security structures, methods and levels of payment need reform, but the primary aim of any attempt at simplification must be to ease access and attainment for those entitled to benefit rather than to ease administration and accounting for management. The review has correctly identified many problems in the present system but, unfortunately, it has failed to identify many answers correctly. That is hardly surprising given that, by announcing a nil cost review, the Secretary of State had already more or less decided what the score would be before the exercise began.
The nil cost criterion was presumably the reason why some of the most obvious questions were not asked. For instance, what level of benefit is necessary to protect people from poverty? That is surely a fundamental question. What effect will means testing have on the take-up rate and to what extent will those just above the arbitrary means test limit be penalised? Those questions are fundamental to any serious consideration of whether a scheme would actually insure against poverty and provide for need, but those questions have been ignored. Means testing is to be extended on the basis that it ensures that help goes to those who really need it, but no study was undertaken to see whether that would be the effect and whether there would be side effects. I contend that means testing does as much to deny help to people who really need it because those people have their dignity as it does to ensure that help is given to those who are technically entitled to it.
The nil cost criterion also means that, at best, money will be taken from the poor and given to the poor in a redistribution of poverty. Given that savings of at least £1 billion — the lowest figure yet conceded by the Government—are expected to flow from the proposals, it is clear that in fact money is to be taken from the poor and given to the wealthy in future tax cuts. The Government's economic statement includes much talk about incentives to the wealthy in terms of tax cuts, higher profits and ownership of former public enterprises, but the incentives to the less well-off are low wages and restricted social security benefits. The recent Budget was mainly a

strategy to bring about a low-wage economy and the Green Paper is the other side of that coin—the residualisation of the welfare state.
The Opposition have referred to it as the distinction between the deserving and the undeserving poor, while the Government talk of concentrating resources on those in greatest need. In fact, it is a residual scheme of assistance for people who will feel stigmatised as a social and economic residue. That is a retreat from Beveridge and a return to the values of the Victorian poor law. It is attacking the poor instead of attacking poverty. The family credit scheme as proposed in the Green Paper is surely a licence for low wages and is obviously in keeping with proposals in the recent Budget. Rather than helping overcome the problem of low wages, this scheme will help sustain low wages. Rather than providing assistance to employees, it will provide wage relief to employers, a hidden grant to encourage low wages. Will the Secretary of State tell me what the difference is between the family credit scheme and the Speenhamland system?
The Government are trying to tell us with their low-wage strategy that poverty is the answer to unemployment. Northern Ireland already has lower income levels and higher unemployment than Great Britain and we are being told that if we have higher unemployment and lower wage levels that will be the spur that will make people get on their bicycles and go to get work. We already have a pilot area in which we have the highest unemployment and the lowest wages imaginable, and the result is community strife and instability. That is the direction in which that sort of Victorian thinking leads.
With regard to the proposed changes to supplementary benefit, in my constituency, with 60,000 people on the electoral roll, there are 21,000 claiming supplementary benefit. The income support proposal which is to replace it can be given a full analysis only when we know what levels of benefit we are talking about, and we do not. It is not clear either on what criteria or indices the Government will determine the levels of payment under the income support scheme, except that it must be lower than a low wage. This gives ground for suspicion and I am particularly worried about that portion of support which is meant to help with heating costs. For example, some parts of the United Kingdom have much higher heating costs than others and a greater incidence of fuel poverty. If the Government's intention is to help those in most need, what is their method of linking support payments to such particular social and regional factors?
Single payments are to be replaced by grants from the social fund. This is probably one of the most pernicious aspects of this Green Paper. Again, there is the example of my constituency. In the life of this Government, from 1978 to 1984, these are the statistics. In Derry city, in 1978, 2,789 single payments were made; in 1984, 12,959 were made. In Strabane, the figures were 1,200 in 1978, and 10,000 in 1984. The figures have been multiplied by six in the lifetime of this Government.
Those figures demonstrate the growing need among people in poverty under the policies of this Government, yet their answer is to give them loans. The people I am talking about are people with dignity. The net result of asking those people to be means-tested for loans is that they will end up with loan sharks and moneylenders—another opportunity for private enterprise.
Secondly, there is this business of assistance with budget management. There is no greater arrogance or


insult to the poor people of our country and society than to suggest that what they need is assistance in managing their budget rather than a rise in their income level. Could any hon. Member manage his family budget on supplementary benefit and feed his family as well as those people do? The best managers of budgets in this country are the women who feed and rear families on the pittances they receive on supplementary benefit. It is a damned insult to the integrity of those people to suggest that what they need is advice on how to manage their budgets.
The philosophy that appears to underlie this effort is based on the notion that a high percentage of social security payments in relation to GDP is bad for economic growth. Why, then, is it that the United Kingdom has a lower percentage of GDP going on social security than many other member states of the European Community? Why is it much lower than in West Germany, which is consistently held up to us as a model economy?
All this has effects on society. I have some experience of deprivation, poverty and alienation. I give a warning from a man with great experience of what deprivation and enforced poverty did to human beings—Martin Luther King. He said:
When an individual is no longer a true participant, when he no longer feels a sense of responsibility to his society, the content of democracy is empty. When the social system does not build security but induces peril, inexorably, the individual is compelled to pull away from a soulless society. This produces alienation, perhaps the most pervasive and insidious development in contemporary society.
I warn the Government that they are not building security but inducing peril. Inexorably, the individual in this soulless society that they are creating will be driven away.

Mr. Timothy Wood: Despite the passionate opposition from the hon. Member for Foyle (Mr. Hume), I give a strong welcome to the proposals in the Green Paper. Over the years, it has amazed me that the Labour party, with all its protestations about the need to help the poor, has been prepared to support a social security system which is incredibly complex and often most unfair.
Although some Labour Back Benchers made constructive points of criticism about the Green Paper, from the Front Bench we heard only blanket opposition, without any detailed consideration of the merits of some of the proposals. In particular, the family credit system is a major step forward from the family income supplement. Its assessment of those in need is based on net income. Secondly, there is an obvious need to simplify the housing benefit system. Although one can argue in due course about numbers, the case for that simplification is overwhelming and I am delighted that at last we are beginning to approach such a simplification.
For years some people in work have been worse off than those out of work. For years, an increase in wage for a family with children could make a family worse off. For years there has been a multitude of benefits which the needy have not understood and which many have not claimed. That is not a satisfactory welfare state.
I can give an example. At my surgery last Saturday, a married man with two children came to see me. His wage meant that his family income was just above that giving an entitlement to family income supplement, but he was entitled to housing benefit. About six months ago, finding

himself short of money, he started to work overtime. Three months later he received a notice from his council saying that it was terribly sorry, but his increased income meant that he lost £120 housing benefit. He worked more overtime, and another three months later he was told that another £98 was owing. There is a case for modifying such absurdities.
The assessment of family credit and housing benefit on the basis of net income is immediately a major step forward. It will mean that the combination of loss of benefits and the incidence of tax will have a marginal rate on the increase of income where the marginal rate of tax and loss of benefit will be about 85 per cent. rather than, as at present, rising to 110 per cent., or even higher percentages. It is obviously desirable that we make those changes. I should like to see the Opposition at least welcoming that sort of change, even if they are discontented about some other aspects.
The Opposition have complained about a lack of figures. In reality, it is possible to develop a variety of sets of figures on the basis of the structures that have been put forward. Indeed, the right hon. Member for Plymouth Devonport (Dr. Owen) did precisely that in his contribution. Even the hon. Member for Oldham, West (Mr. Meacher) has put forward some figures, although I must admit that they are so bizarre that he has been either scaremongering or incompetent.
I believe that there is every likelihood that the family credit slope will be about 50 per cent., as it is now, and that, the housing benefit slope will be something similar. As a consequence, an increase in income will be subject to a total rate of about 85 per cent. If we go along that path, I believe that we will achieve a considerable step forward in the alleviation of the poverty trap and the unemployment trap. I support the proposals.

Mr. Michael Meacher: The Secretary of State made two new points in opening the debate, and I think only two, in an otherwise fairly predictable speech. The first was to announce that the widow's allowance of £1,000 will be tax-free — what a concession that is. What he did not add was that most widows on £50 a week or so pay hardly any tax now. In any case, the widow's allowance is all too likely to be taken into account in the calculation of entitlement to the death grant if it is applied for.
Secondly, the right hon. Gentleman made it clear that he would give no commitment that the social fund would be topped up if it ran out. This means that, after doubling poverty since 1979, the Government are now cash-limiting the relief of poverty. That is an extraordinarily harsh decision. I notice that even his hon. Friend the Member for Thanet, North (Mr. Gale), who is no Tory softie, could not stomach it. It says something about the nature of the Green Paper exercise, which my hon. Friend the Member for Birkenhead (Mr. Field) aptly described as similar to having an X-ray without a barium meal, that even the Thatcherite wing of the Tory party finds it difficult to stomach parts of it.
The Green Paper is surely unique in at least two respects. Its declared aims are almost wholly belied by its own evidence. Not only does it blank out all the relevant conclusions; it conceals the fact that, on all the main


issues, the Government countermanded the conclusions of their own review committee, in every case to the marked detriment of claimants.
The Secretary of State has repeatedly made it clear—he did so again today, and it is stated in the Government motion—that the four major themes of the Green Paper are targeting of the needy, simplification, improving work incentives and a new partnership between state and individual. It is truly astonishing that the Government should have chosen to justify in the Green Paper four themes which are manifestly and explicitly contradicted by the contents of their own Green Paper.
Targeting is, of course, the current Tory buzz word for more means testing and more cuts. But SERPS is not being targeted better; it is being abolished. Housing benefit is not being targeted better; it is being cut. Unemployed families, where some of the worst poverty in Britain today exists, are not being targeted with increased aid; they have been victimised with further cuts. If targeting were really the aim, why are the poorest being required for the first time ever to pay a minimum of 20 per cent. of their general rates out of an already meagre and inadequate basic benefit? If targeting were the real aim of the exercise, why are 1·8 million families being excluded altogether from housing benefit, of whom the great majority are owner-occupier pensioners, especially widows with small occupational pensions? Is targeting now to be the reward for a lifetime of thrift?
I commend the brave speech of the hon. Member for Brighton, Kemptown (Mr. Bowden) because he had the courage to point out how punitive the new rules on the tapers are. I hope that his right hon. Friend took note of those honest comments.
The only targeting in which the Government are interested is targeting on the rich, and they have certainly concentrated on them. According to an answer from the Treasury on 4 April, no less than an extra £2,000 million in real terms has been targeted since 1979 on the richest 2 per cent. of the population—those earning more than £30,000 a year. Had that money been targeted on pensioners, every pensioner in Britain would receive a Christmas bonus of £200 this year.
The Secretary of State justifies his proposals on grounds of simplification, but the Green Paper shows that the opposite is the case. The proposals will involve greater complexity. Instead of a single set of supplementary benefit rates, there will be four tiers of the new income support scheme, and a proliferation of at least seven premiums to the basic rate. My hon. Friend the Member for Glasgow, Provan (Mr. Brown) spoke eloquently on that point. There will be two premiums for the elderly, two for the unemployed and others for single-parent families, the disabled and families in general. That is not simplification. It is swapping one complicated system—I agree that the present system is highly bureaucratic—for another, which I predict will be just as confusing to claimants as its predecessor, supplementary benefit. The Government's two main alleged objectives—targeting and simplification—not only do not coincide, but are incompatible.
"Targeting" is Fowlerspeak for more means testing. As the Secretary of State wrote to the Child Poverty Action Group a year ago:

By their nature, means-tested benefits are complicated to legislate for, administer and understand.
He was entirely accurate. He should not try to fool us that this is an exercise in simplification.
Moreover, the new social fund will not simplify; it will do the reverse. It will replace unambiguous rights with vague discretion. Local social security officers will be put in a highly invidious position, to which no civil servant should be subjected, of deciding who is helped in an emergency and who is not. In the Prime Minister's brave new Victorian world, they will be like the guardians of the Victorian poor law. There will be no independent appeal against their decisions, however idiosyncratic. This is not simplifying, it is maximising bureaucratic discretion and arbitrary power.
Perhaps when the Secretary of State mentioned simplification, he meant the housing benefit scheme, to which the hon. Member for Stevenage (Mr. Wood) referred. If so, all I can say is that it is a bit rum to make a virtue of simplifying a scheme that he created—warts, complexities and all. A little more humility and contrition would not come amiss from the right hon. Gentleman for wishing on us whatThe Times, which is not given to Left-wing rhetoric, recently described as
the biggest administrative fiasco in the history of the welfare state.
Another rationale used by the Secretary of State for the Green Paper is that it improves work incentives. Apart from the fact that that is a Tory euphemism for penalising the unemployed, as my hon. Friend the Member for Dunfermline, East (Mr. Brown) said, the Secretary of State is refuted by his own document. If, as is stated, the withdrawal rate on housing benefit is 70 per cent., and that on family credit is 60 per cent., as the leaks have said — the leaks have proved to be accurate so far —taxpayers claiming family credit and housing benefit will lose about — [Interruption.] The Secretary of State obviously has a distaste for figures. Although he is not prepared to give them to the House, perhaps I can give one or two. Such a family would lose 93p on every extra pound that it earns. That is no great incentive to work harder.
What matters even more is that the Green Paper shows that there will be an increase in the number of poor people who pay marginal tax rates well above the 60 per cent. tax rate incurred by millionaires. One wonders how many Tory MPs would view with equimimity being subjected to a tax rate at that level in the interest of improving work incentives.
The Government's fourth justification for their proposals is the so-called twin pillar approach—the joint partnership between state and individual. It is mind-boggling that the Secretary of State has the brass neck to proclaim as a guiding principle an objective which even a moment's reflection shows is blatantly contradicted by what is by far the most important proposal in the Green Paper—the abolition of SERPS. I can only presume that it is based on the notion that if one tells a big enough whopper, and tells it often enough, no one will notice it.
So much for the Government's stated objectives, none of which stands up to close examination. Therefore, it is obvious that the Government's real motives, unstated, are different. They are perhaps best indicated by one key piece of evidence—the decisions taken by the Secretary of State himself, which overrule the recommendations that his own reviewing team made to him. They are extremely revealing.
First and foremost, the Secretary of State overruled the view of the committee reviewing pensions, which he himself chaired, so as to insist on the abolition of SERPS. The right hon. Gentleman shakes his head, but we now know that all three—which must be unparalleled—of the independent specialist advisers on his own inquiry team wholly opposed this move.
The Secretary of State overruled his housing benefit review committee to insist that the poorest families should be required to meet a minimum 20 per cent. of their rates bill. In the debate today even some of his Back Benchers have been jibbing at that. That is his decision. In its letter to the Secretary of State, the review committee said:
We have concluded that for those on supplementary benefit or equivalent net income, it would be unrealistic to suppose that even a small proportion of housing costs could be met at the expense of other personal requirements. We believe that 100 per cent. help with housing costs for those on the lowest incomes is the only fair way of meeting their needs within the present vagaries of the housing market.
That was uncompromising advice, but it was deliberately repudiated by the right hon. Gentleman.
The committee made it clear that it disagreed with the Government's argument that making low income families pay a proportion of rates would help control the level of rates. The committee could find no evidence—and the right hon. Gentleman has given us no evidence—that such families have any control over the level of rates set.
The right hon. Gentleman overruled the committees even though their members were all personally handpicked Conservatives. The housing benefit review committee argued:
clearly there would have to be some flat-rate addition to current supplementary benefit scale rates to cover the contribution towards housing costs".
Again, the Secretary of State overruled the committee. There is no mention of any such compensation in the Green Paper.
The housing benefit review committee recommended that, to make up for the loss to owner-occupiers from changes in the rates taper, an element of mortgage interest should be covered by housing benefit. The Secretary of State not only overruled the committee but has gone to the other extreme by seeking to restrict mortgage interest payments to those on supplementary benefit for the first six months, even though, when the rate of repossession is already known to be rising, that decision is bound to lead to increased homelessness and to many unemployed families being thrown out on the street.
There is one connecting theme running through all these examples. At every point where the Secretary of State has intervened directly and personally to overrule his own review committees, it is to insert major cuts in benefit. The work of the review committees may have been about restructuring, but the Secretary of State's contribution has been very different.
The damaging parts of the package which will hit people hardest were not recommended—they were often directly opposed — by the review committees. The Secretary of State is responsible for them. He is the guilty man. That is why we are suspicious about his and the Prime Minister's constant excuses and prevarications about the one glaring omission from the Green Paper which has still not been cleared up in the debate—the publication of the figures.
I make no apology for returning to that subject, because it is crucial. We have had plenty of promises and

assurances, but how many times does one trust a tainted source? First, the Secretary of State promised that he would not abolish SERPS. On 23 November, 1983 he said:
My aim in setting up an inquiry is not to call into question the fundamental pensions structure that was established in the 1970s with all-party agreement, and to which I was a party." —[Official Report, 23 November, 1983; Vol. 49, c. 360.]
The Secretary of State's commitment was so unequivocal that that matter was not debated by the pensions inquiry. That promise has now been calculatedly broken.
On 3 June 1984, the Secretary of State gave an undertaking and said:
it is impossible to provide a detailed analysis, because clearly it depends on the benefits rates set in April 1987."—[Official Report, 3 June, 1985; Vol. 80, c. 42.]
That excuse has now been exposed for the charade it always was by the revelation that the Secretary of State suppressed the details of gainers and losers at the last moment when the report was at Bemrose Security Printing at Derby. If that is not the case, we shall be glad to know about it.
When will we get the figures? Ministers say that they cannot provide them because they cannot predict the benefit rates of April 1987. If they cannot estimate what the benefit rates will be in less than two years, how can they estimate the cost of SERPS in 50 years time with such precision that they already know that it is unviable? [Interruption.] If the Secretary of State would like to assist us and show how his mind works on any of those matters I should be happy to give way. Does the Secretary of State want to speak?
Stalling until 1987 is a cover-up. Why do they not give the figures of gainers and losers that apply now? They are much the same as those shown to the Cabinet. Under pressure of questioning from my right hon. Friend the Leader of the Opposition, the Prime Minister has been forced to bring forward the publication of the figures from April 1987 to November 1985. What will be known in November this year that is not already known?
One telling piece of internal evidence makes it clear that the figures exist and are available. If the saving from housing benefit changes is known to be £500 million, as the Government have repeatedly stated, the new income support scheme levels must be known or that figure could not be calculated. If the figures are available, why can we not have them now?
For the Secretary of State, after the most extensive review of the welfare state since Beveridge—as he likes to call it—to produce a Green Paper without figures is the biggest con since Horatio Bottomley. It comes from a Government who are always talking about closer financial control but who cannot even tell us the aggregate cost of their proposals. I wonder what Conservative Members would think at the company meetings which they no doubt attend if the company chairman presented an annual report but said that the profit and loss account was not yet available.
The Secretary of State has once again declared himself not guilty; nothing could be further from his mind than that he might refuse to publish the figures to conceal the details of benefit cuts.
The Government stand convicted too often of grievous bodily harm to the low paid and the poor. Innocence is not a very plausible posture from a Government who, according to the independent estimates of statisticians in the House, have already robbed the poor of £8·2 billion


since 1979 — enough to give every pensioner in the country an extra £16 a week for every week this year. It is even less plausible when one considers the malice aforethought being committed against SERPS. The Government's able defence of that act of ideological vandalism is that there will be too many pensioners in the third and fourth decades of the next century for the scheme to be affordable.
I will repeat that quotation. Given that it is now Government policy to uprate pensions in line with prices rather than earnings,
it would be difficult to argue that we are unloading an intolerable burden on future generations.
That is not a quotation of a Labour spokesman or even Mr. Stewart Lyon, from whom the truth is now finally being forced out, but from the Secretary of State on 13 October 1983. He was a defender of SERPS then. He still saw its merits, through relatively independent and objective eyes.

Mr. Eggar: Will the hon. Gentleman give way?

Mr. Meacher: No. I have undertaken to finish in five minutes.
According to the Secretary of State, just one thing has changed since then. The worker-pensioner ratio has been revealed to worsen in 2035, and so it does. There is only one thing wrong with that argument—the Government Actuary's projections as used in the Green Paper also forecast that the worker-pensioner ratio will substantially improve again by 2050. There is no mention of that in the Green Paper, although such information will certainly have been known to the Secretary of State and to his committee.
Several other important questions about SERFS are conveniently unanswered in the Green Paper. I hope that we shall get an answer from the Minister. If a universal state earnings-related scheme cannot be afforded, how can a universal scheme of private pensions be afforded any better when both are paid for out of the same current production of the working population? How can it be justified to force people to make higher contributions to receive a lesser pension?
I pay tribute to my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and to my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) for what they said about the disabled. How will invalidity benefits fit into a regime of compulsory private pensions when the disabled are such bad risks in the private insurance market? How can it be justified in terms of administrative efficiency, which is so dear to Conservative Members, to abolish SERI'S for which administrative costs work out at 1·5 per cent. and to replace it with private pensions for which administrative costs average 18 per cent.?
What effect will it have on the alleged savings to the Exchequer if large numbers of companies decide to contract their schemes back into SERPS, as many of them will because it is in their interests to do so? Above all, how can it be justified to consign millions of low-paid workers—women, long-term sick and disabled and those who care for them—to poverty in retirement, as will be the inevitable result of abolishing SERFS, when the Government's Social Security Advisory Committee had this to say about the future of SERFS:

At this distance in time we do not think there can be solid grounds for altering the scheme now for fear of all the worst outcomes occurring steadily for 40 years."?
In trying to give a veneer of respectability to this operation candle-end, intermingled with some really damaging cuts, the Secretary of State has tried to wrap himself in the mantle of Beveridge. A more bizarre garb for him it is difficult to imagine. To compare Beveridge with Fowler is to confuse the Samaritan with the thieves he fell among. There is no political mandate for these proposals. Not a word was whispered about them in the last Tory manifesto. As my hon. Friend the Member for Pontypridd (Mr. John) pointed out, there has been no consultation with Opposition Members, and the consultation period is far too short. The polls show that most of the proposals are repudiated by the electorate, in some cases by large majorities.
The proposals carry no moral or political legitimacy. They have none of the social vision of the real Beveridge. The general election will consign them to the dustbin of history. It will be left to a Labour Government, whom the British people know genuinely believe in the welfare state, to produce a new and better vision of security, with dignity and without a means test, which was always the ideal of the Beveridge revolution.

The Minister for Social Security (Mr. Tony Newton): I must first ask whether the proposals which the hon. Member for Oldham, West (Mr. Meacher) brought before the House about two months ago are already in the dustbin of history. Not surprisingly we have not heard them repeated tonight. [HON. MEMBERS: "Answer the debate."] I shall answer the debate. [Interruption.]

Mr. Speaker: Order. I ask the House to give the Minister a chance. He has hardly been speaking for a minute.

Mr. Newton: I could not refrain from commenting on what appears to be the fastest movement from printing to dustbin in history.
This has been a genuinely important debate for two reasons. First, as my hon. Friend the Member for Eastleigh (Sir D. Price) pointed out in a wry fashion, the Government are seeking to consult widely and fully on the Green Paper. I am sure that hon. Members will agree that it is appropriate that the House should have this early major opportunity to express its views on the Government's proposals. Secondly — this cannot be disguised, despite all the rhetoric from Opposition Members—the debate has been encouraging in that no one has seriously questioned the need for reform or that the Government have taken a proper initiative in looking at a system which no one believes is doing the job that we want it to do, and in seeking to focus attention on those problems and a solution.
It would be idle to pretend that the degree of consensus about the background to the problems in social security has been reflected in the debate by the views expressed by Opposition Members on some of the proposals. But even there, on an important question, which is basic to the whole of our welfare state, there is a degree of unanimity, which I welcome. It is the determination of both sides of the House —I emphasise this as being central to the Government's proposals — to maintain and protect the basic state national insurance retirement pension as the


foundation of our provision for people in their old age. That has been demonstrated again in practice today by the uprating that the Government have announced, and restated firmly in the Green Paper as the basis of our policy.
The difference between us comes in our view of how that basic state provision should be topped up or added to in providing additional pensions for people's retirement. The Labour party's position, as defined in the debate, is to defend a position that no one else, either in the House or, as far as I can judge, in the country, believes is tenable—

Mr. Corbett: Rubbish. It is only the hon. Gentleman's advisers who are saying that.

Mr. Newton: I shall take up that point. It is inaccurate to say—

Mr. Corbett: That is not true.

Mr. Newton: Perhaps the hon. Gentleman will allow me to answer his first question before even dodging the reply. It is simply untrue that all the advisers on the Government inquiry into retirement take the view that has been attributed to them. That is clear to anybody who knows them. The Labour party takes the position of defending the existing SERFS structure. The alliance, as I understand it—is not entirely clear whether its policy reflects an agreement between both parts of the alliance, but it was represented by what the right hon. Member for Plymouth, Devonport (Dr. Owen) said—is in favour, to put it bluntly, of a policy of cutting the benefits and putting nothing in their place.
The Government's policy on SERFS is to develop the partnership between the state and the individual, a partnership that was central to the Beveridge report in a new and fruitful way. My right hon. Friend gave the figures in his speech, which have led us to the conclusion that the new development in place of the present arrangement for SERF'S in the longer run is required. I shall not attempt to repeat them now.
Neither the Leader of the Opposition in his opening speech nor the hon. Member for Oldham, West (Mr. Meacher) in his closing speech appeared to dispute the figures that my right hon. Friend gave. Indeed, they did not seriously discuss them. My right hon. Friend gave the figures of the projections that have been made by the Government Actuary's department of the prospective cost of SERFS on various assumptions at various periods until the first third of the next century. Those figures were not seriously disputed by the right hon. Gentleman or his hon. Friend. Indeed, as I said, they were not seriously discussed. The Leader of the Opposition simply sought to deluge them with words.
The Leader of the Opposition gave estimates for the contribution levels that would be required to pay for SERFS around the year 2033. He suggested that about a 2 per cent. contribution increase might accommodate the bills that would be building up. His estimates are farfetched compared with the estimates that he can read in the Government Actuary's report published for the pensions inquiry, showing what the case might be on the most difficult assumptions, when there might be up to a 10 per cent. increase in national insurance contributions.

Mr. Robert C. Brown: The Minister misses the extremely serious point that is at

issue. If, 10 years ago, the Government Actuary and all the parties in the House agreed a scheme that was tenable for the next 50 years, what confidence will the British public have in any scheme that the hon. Gentleman and his right hon. Friend the Secretary of State put forward in the future?

Mr. Newton: As my right hon. Friend the Secretary of State made clear in his speech, the factor that has forced itself on the Government's intention is that the estimates and assumptions on which the decisions about SERFS were based—

Mr. Corbett: That was not said 18 months ago.

Mr. Newton: Because 18 months ago the data from the 1981 census were not available. [Interruption.] It is no good Opposition Members disputing the fact that the estimates on which the decisions about SERFS were based in 1975 reflected an estimate of the number of pensioners in the early part of the next century 1 million less than — [Interruption.] If they were all alive, and if the Labour Government knew what would happen, why did they not publish the figures at the time? [Interruption.]

Mr. Speaker: Order. The debate is becoming disorderly. As far as I know, those addressing the Minister from a sedentary position did not take part in the debate.

Mr. Newton: We now know that there will be 1 million more pensioners in the early part of the next century than was known, let alone said, in 1975. By about the middle of the next century—2033 to be precise—there will be 4 million pensioners more than we have to provide for now.
As my hon. Friend the Member for Eastleigh made clear, the projections that relate to the ratio of contributors to pensioners, reflecting the absence of any improvement in the birth rate in the intervening period, suggests a steady decline to that point in time of the number of contributors in relation to the number of pensioners. The Labour party may wish to ignore those figures. I accept that the alliance recognises that there is a real problem.
The Government believe that it would be wrong to ignore the new evidence which has come to light during the course of the analysis of the inquiry. There are three reasons for that—first, knowingly to place on the next generation a burden that we cannot be sure they can afford is not an act of responsible government. Secondly, and perhaps more important, unless we can be sure that the promises we are making to pensioners can be fulfilled, it is wrong to let people go on for 30 or 40 years building up expectations that may not be fulfilled when the time comes.

Mr. Kinnock: If the hon. Gentleman is arguing that it is only possible to make provision by extending the private sector and diminishing SERFS, can he tell us how the private sector will meet all those new obligations, especially as the most obvious place for investment is in index-linked gilts introduced by the Secretary of State, which is precisely where the Government could be investing any surpluses that they collect from SERFS?

Mr. Newton: But the Government do not collect surpluses, and that is the point—[Interruption.]

Mr. Speaker: Order. I am sure that the House wishes to hear the answer to the right hon. Gentleman important question.

Mr. Newton: If, as we now know, the Leader of the Opposition does not even realise that the present state pension scheme is a pay-as-you-go scheme, it is no wonder that the Labour party is in a mess. The right hon. Gentleman has committed a masterpiece of building a monumental brick without straw and then dropping it on his own feet. The Government are not prepared to seek to maintain a system—

Mr. Kinnock: Come on, answer the question.

Mr. Newton: I have answered the right hon. Gentleman. [Interruption.] I can wait for Opposition Members to listen. The trouble with the right hon. Gentleman's question is that it shows that he does not know what he is talking about. And if he does not know what he is talking about, no wonder the pensioners of the future cannot rely on his promises.
What the Government are proposing faces up to the realities of the projections that we have for the number of pensioners and the ratio of contributors; recognises that it would be irresponsible to continue to make promises that we cannot guarantee that our children will be able to fulfil; and puts in place a structure that we believe can sustain pensioners in the future, with a promise on which they can really rely.
The Leader of the Opposition has recognised the mistake he has made in what he said. We now want him to recognise that the policy that he is proposing is unsustainable and that it is time that the Labour Government — [HON. MEMBERS: "Hear, hear."] — the Labour party—

Mr. David Winnick: It will be the Labour Government in two or three years from now.

Mr. Newton: It is time that the Labour party faced up to its responsibilities.
The question put by the Leader of the Opposition revealed more clearly than ever what has come through in the speeches of the right hon. Gentleman and his hon. Friend the Member for Oldham, West in this debate, that they have absolutely nothing constructive to say about the policy that is required to sustain the social security system in Britain today. Not a constructive word have we heard throughout the debate from them. We have had torrents of rhetoric from the right hon. Gentleman and one extravagant adjective after another from the hon. Member for Oldham, West.
What has been the contribution to the debate of the hon. Member for Oldham, West? It has been to complain that the Government have not done everything that their advisers advised. But the Opposition do not even do what their spokesman on social security advises — [Interruption.]—and when we ask Labour Members what they would do and what their view is of our proposals we get no answer. When we ask them what their proposals are, we get no answer. When the Leader of the Opposition was asked on the radio recently to give his figures, he replied, "I will not give figures that will not be known for two or three years."

Mr. Kinnock: What about the Government's figures?

Mr. Newton: Let us have the figures for the Labour alternative.

Mr. Kinnock: Now answer the question: what are the Government's figures?

Mr. Newton: I will give the right hon. Gentleman the answer. When we have settled the structure that we propose, we will give the figures to illustrate the consequences. When we give our figures, perhaps we shall have the right hon. Gentleman's figures and, for the first time, a serious contribution to the debate from the Labour party.

Question put, That the amendment be made:—

The House divided: Ayes 178, Noes 335.

Division No. 241]
[10.00pm


AYES


Abse, Leo
Foot, Rt Hon Michael


Anderson, Donald
Foster, Derek


Archer, Rt Hon Peter
Foulkes, George


Ashley, Rt Hon Jack
Fraser, J. (Norwood)


Ashton, Joe
Garrett, W. E.


Atkinson, N. (Tottenham)
George, Bruce


Bagier, Gordon A. T.
Gilbert, Rt Hon Dr John


Banks, Tony (Newham NW)
Godman, Dr Norman


Barnett, Guy
Golding, John


Barron, Kevin
Gould, Bryan


Beckett, Mrs Margaret
Gourlay, Harry


Bell, Stuart
Hamilton, James (M'well N)


Benn, Tony
Hardy, Peter


Bennett, A. (Dent'n &amp; Red'sh)
Harman, Ms Harriet


Bermingham, Gerald
Hart, Rt Hon Dame Judith


Bidwell, Sydney
Hattersley, Rt Hon Roy


Blair, Anthony
Healey, Rt Hon Denis


Boothroyd, Miss Betty
Heffer, Eric S.


Boyes, Roland
Hogg, N. (C'nauld &amp; Kilsyth)


Bray, Dr Jeremy
Home Robertson, John


Brown, Gordon (D'f'mline E)
Howell, Rt Hon D. (S'heath)


Brown, Hugh D. (Provan)
Hoyle, Douglas


Brown, N. (N'c'tle-u-Tyne E)
Hughes, Dr. Mark (Durham)


Brown, R. (N'c'tle-u-Tyne N)
Hughes, Robert (Aberdeen N)


Brown, Ron (E'burgh, Leith)
Hume, John


Buchan, Norman
Janner, Hon Greville


Caborn, Richard
John, Brynmor


Callaghan, Rt Hon J.
Kilroy-Silk, Robert


Campbell, lan
Kinnock, Rt Hon Neil


Carter-Jones, Lewis
Lambie, David


Clark, Dr David (S Shields)
Lamond, James


Clarke, Thomas
Leadbitter, Ted


Clay, Robert
Leighton, Ronald


Clwyd, Mrs Ann
Lewis, Ron (Carlisle)


Cocks, Rt Hon M. (Bristol S.)
Lewis, Terence (Worsley)


Cohen, Harry
Litherland, Robert


Concannon, Rt Hon J. D.
Lloyd, Tony (Stretford)


Cook, Frank (Stockton North)
McCartney, Hugh


Cook, Robin F. (Livingston)
McDonald, Dr Oonagh


Corbett, Robin
McGuire, Michael


Corbyn, Jeremy
McKay, Allen (Penistone)


Cowans, Harry
McKelvey, William


Cox, Thomas (Tooting)
MacKenzie, Rt Hon Gregor


Craigen, J. M.
McNamara, Kevin


Crowther, Stan
McTaggart, Robert


Cunliffe, Lawrence
McWilliam, John


Cunningham, Dr John
Madden, Max


Davies, Rt Hon Denzil (L'lli)
Martin, Michael


Davies, Ronald (Caerphilly)
Mason, Rt Hon Roy


Davis, Terry (B'ham, H'ge H'I)
Maxton, John


Deakins, Eric
Maynard, Miss Joan


Dewar, Donald
Meacher, Michael


Dobson, Frank
Michie, William


Dormand, Jack
Mikardo, lan


Douglas, Dick
Millan, Rt Hon Bruce


Duffy, A. E. P.
Miller, Dr M. S. (E Kilbride)


Eastham, Ken
Morris, Rt Hon A. (W'shawe)


Edwards, Bob (W'h'mpt'n SE)
Morris, Rt Hon J. (Aberavon)


Ellis, Raymond
Nellist, David


Evans, John (St. Helens N)
Oakes, Rt Hon Gordon


Ewing, Harry
O'Brien, William


Fatchett, Derek
O'Neill, Martin


Faulds, Andrew
Orme, Rt Hon Stanley


Field, Frank (Birkenhead)
Park, George


Fields, T. (L'pool Broad Gn)
Parry, Robert


Fisher, Mark
Patchett, Terry






Pavitt, Laurie
Snape, Peter


Pendry. Tom
Soley, Clive


Pike, Peter
Spearing, Nigel


Powell, Raymond (Ogmore)
Stewart, Rt Hon D. (W Isles)


Prescott, John
Stott, Roger


Radice, Giles
Strang, Gavin


Randall, Stuart
Straw, Jack


Redmond, M.
Thomas, Dafydd (Merioneth)


Rees, Rt Hon M. (Leeds S)
Thomas, Dr R. (Carmarthen)


Richardson, Ms Jo
Thorne, Stan (Preston)


Roberts, Allan (Bootle)
Tinn, James


Roberts, Ernest (Hackney N)
Wardell, Gareth (Gower)


Robertson, George
Wareing, Robert


Rooker, J. W.
Welsh, Michael


Rowlands, Ted
White, James


Ryman, John
Wigley, Dafydd


Sedgemore, Brian
Williams, Rt Hon A.


Sheerman, Barry
Wilson, Gordon


Sheldon, Rt Hon R.
Winnick, David


Short, Ms Clare (Ladywood)
Woodall, Alec


Short, Mrs R.(W'hampt'n NE)
Young, David (Bolton SE)


Silkin, Rt Hon J.



Skinner, Dennis
Tellers for the Ayes:


Smith, C.(Isrton S &amp; F'bury)
Mr. Frank Haynes and


Smith, At Hon J. (M'kl'ds E)
Mr. Don Dixon.


NOES


Adley, Robert
Chope, Christopher


Aitken, Jonathan
Churchill, W. S.


Alexander, Richard
Clark, Hon A. (Plym'th S'n)


Alison, Rt Hon Michael
Clark, Dr Michael (Rochford)


Amery, Rt Hon Julian
Clark, Sir W. (Croydon S)


Amess, David
Clarke, Rt Hon K. (Rushcliffe)


Ancram, Michael
Clegg, Sir Walter


Arnold, Tom
Cockeram, Eric


Ashby, David
Colvin, Michael


Aspinwall, Jack
Cope, John


Atkins, Rt Hon Sir H.
Cormack, Patrick


Atkins, Robert (South Ribble)
Couchman, James


Baker, Rt Hon K. (Mole Vall'y)
Cranborne, Viscount


Baker, Nicholas (N Dorset)
Critchley, Julian


Baldry, Tony
Crouch, David


Banks, Robert (Harrogate)
Currie, Mrs Edwina


Batiste, Spencer
Dickens, Geoffrey


Beaumont-Dark, Anthony
Dicks, Terry


Bellingham, Henry
Dorrell, Stephen


Bendall, Vivian
Douglas-Hamilton, Lord J.


Benyon, William
Dover, Den


Best, Keith
du Cann, Rt Hon Sir Edward


Biffen, Rt Hon John
Dunn, Robert


Biggs-Davison, Sir John
Durant, Tony


Blackburn, John
Dykes, Hugh


Body, Richard
Edwards, Rt Hon N. (P'broke)


Bonsor, Sir Nicholas
Eggar, Tim


Bottomley, Peter
Emery, Sir Peter


Bottomley, Mrs Virginia
Evennett, David


Bowden, Gerald (Dulwich)
Eyre, Sir Reginald


Braine, Rt Hon Sir Bernard
Fallon, Michael


Brandon-Bravo, Martin
Farr, Sir John


Bright, Graham
Favell, Anthony


Brinton, Tim
Fenner, Mrs Peggy


Brittan, Rt Hon Leon
Finsberg, Sir Geoffrey


Brooke, Hon Peter
Fletcher, Alexander


Brown, M. (Brigg &amp; CI'thpes)
Fookes, Miss Janet


Browne, John
Forman, Nigel


Bruinvels, Peter
Forsyth, Michael (Stirling)


Bryan, Sir Paul
Forth, Eric


Buchanan-Smith, Rt Hon A.
Fowler, Rt Hon Norman


Buck, Sir Antony
Fox, Marcus


Budgen, Nick
Franks, Cecil


Burt, Alistair
Fraser, Peter (Angus East)


Butcher, John
Freeman, Roger


Butler, Hon Adam
Fry, Peter


Butterfill, John
Gale, Roger


Carlisle, John (N Luton)
Galley, Roy


Carlisle, Kenneth (Lincoln)
Gardiner, George (Reigate)


Carlisle, Rt Hon M. (W'ton S)
Gardner, Sir Edward (Fylde)


Cash, William
Garel-Jones, Tristan


Chalker, Mrs Lynda
Gilmour, Rt Hon Sir Ian


Channon, Rt Hon Paul
Glyn, Dr Alan





Goodhart, Sir Philip
Macfarlane, Neil


Goodlad, Alastair
MacGregor, John


Gorst, John
MacKay, Andrew (Berkshire)


Gow, Ian
MacKay, John (Argyll &amp; Bute)


Gower, Sir Raymond
Maclean, David John


Grant, Sir Anthony
McNair-Wilson, P. (New F'st)


Gregory, Conal
Madel, David


Griffiths, Sir Eldon
Major, John


Griffiths, Peter (Portsm'th N)
Malins, Humfrey


Grist, Ian
Malone, Gerald


Ground, Patrick
Maples, John


Grylls, Michael
Marland, Paul


Gummer, John Selwyn
Marlow, Antony


Hamilton, Neil (Tatton)
Marshall, Michael (Arundel)


Hampson, Dr Keith
Mates, Michael


Hanley, Jeremy
Maude, Hon Francis


Hannam, John
Maxwell-Hyslop, Robin


Hargreaves, Kenneth
Mayhew, Sir Patrick


Harris, David
Mellor, David


Harvey, Robert
Merchant, Piers


Haselhurst, Alan
Meyer, Sir Anthony


Havers, Rt Hon Sir Michael
Miller, Hal (B'grove)


Hawkins, Sir Paul (SW N'folk)
Mills, Iain (Meriden)


Hawksley, Warren
Mills, Sir Peter (West Devon)


Hayhoe, Rt Hon Barney
Miscampbell, Norman


Hayward, Robert
Mitchell, David (NW Hants)


Heath, Rt Hon Edward
Moate, Roger


Heathcoat-Amory, David
Montgomery, Sir Fergus


Heddle, John
Moore, John


Henderson, Barry
Morris, M. (N'hampton, S)


Heseltine, Rt Hon Michael
Morrison, Hon C. (Devizes)


Hickmet, Richard
Morrison, Hon P. (Chester)


Hicks, Robert
Moynihan, Hon C.


Higgins, Rt Hon Terence L.
Neale, Gerrard


Hind, Kenneth
Needham, Richard


Hirst, Michael
Nelson, Anthony


Hogg, Hon Douglas (Gr'th'm)
Neubert, Michael


Holland, Sir Philip (Gedling)
Newton, Tony


Holt, Richard
Nicholls, Patrick


Hordern, Sir Peter
Normanton, Tom


Howard, Michael
Norris, Steven


Howarth, Alan (Stratf'd-on-A)
Onslow, Cranley


Howarth, Gerald (Cannock)
Oppenheim, Phillip


Howell, Rt Hon D. (G'ldford)
Oppenheim, Rt Hon Mrs S.


Howell, Ralph (N Norfolk)
Osborn, Sir John


Hubbard-Miles, Peter
Ottaway, Richard


Hunt, John (Ravensbourne)
Page, Sir John (Harrow W)


Jackson, Robert
Page, Richard (Herts SW)


Jessel, Toby
Parkinson, Rt Hon Cecil


Johnson Smith, Sir Geoffrey
Parris, Matthew


Jones, Gwilym (Cardiff N)
Patten, J. (Oxf W &amp; Abdgn)


Jones, Robert (W Herts)
Pattie, Geoffrey


Jopling, Rt Hon Michael
Pawsey, James


Joseph, Rt Hon Sir Keith
Peacock, Mrs Elizabeth


Kershaw, Sir Anthony
Percival, Rt Hon Sir Ian


Key, Robert
Pollock, Alexander


King, Roger (B'ham N'field)
Porter, Barry


King, Rt Hon Tom
Portillo, Michael


Knight, Gregory (Derby N)
Powell, William (Corby)


Knowles, Michael
Powley, John


Knox, David
Prentice, Rt Hon Reg


Lamont, Norman
Price, Sir David


Lang, Ian
Prior, Rt Hon James


Latham, Michael
Proctor, K. Harvey


Lawler, Geoffrey
Pym, Rt Hon Francis


Lawrence, Ivan
Rathbone, Tim


Lawson, Rt Hon Nigel
Rees, Rt Hon Peter (Dover)


Lee, John (Pendle)
Renton, Tim


Leigh, Edward (Gainsbor'gh)
Rhodes James, Robert


Lennox-Boyd, Hon Mark
Rhys Williams, Sir Brandon


Lewis, Sir Kenneth (Stamf'd)
Ridley, Rt Hon Nicholas


Lightbown, David
Ridsdale, Sir Julian


Lilley, Peter
Rifkind, Malcolm


Lloyd, Ian (Havant)
Rippon, Rt Hon Geoffrey


Lloyd, Peter, (Fareham)
Roberts, Wyn (Conwy)


Lord, Michael
Roe, Mrs Marion


Luce, Richard
Rossi, Sir Hugh


Lyell, Nicholas
Rost, Peter


McCrindle, Robert
Rowe, Andrew


McCurley, Mrs Anna
Ryder, Richard






Sackville, Hon Thomas
Thurnham, Peter


Sainsbury, Hon Timothy
Townend, John (Bridlington)


St. John-Stevas, Rt Hon N.
Townsend, Cyril D. (B'heath)


Sayeed, Jonathan
Tracey, Richard


Shaw, Giles (Pudsey)
Trippier, David


Shaw, Sir Michael (Scarb')
Trotter, Neville


Shepherd, Cohn (Hereford)
Twinn, Dr Ian


Shepherd, Richard (Aldridge)
Vaughan, Sir Gerard


Silvester, Fred
Viggers, Peter


Skeet, T. H. H.
Waddington, David


Smith, Tim (Beaconsfield)
Wakeham, Rt Hon John


Soames, Hon Nicholas
Walden, George


Speed, Keith
Walker, Bill (T'side N)


Speller, Tony
Walker, Rt Hon P. (W'cester)


Spencer, Derek
Walters, Dennis


Spicer, Jim (W Dorset)
Ward, John


Spicer, Michael (S Worcs)
Wardle, C. (Bexhill)


Squire, Robin
Warren, Kenneth


Stanbrook, Ivor
Watson, John


Stanley, John
Watts, John


Steen, Anthony
Wells, Bowen (Hertford)


Stern, Michael
Wells, Sir John (Maidstone)


Stevens, Lewis (Nuneaton)
Wheeler, John


Stewart, Allan (Eastwood)
Whitfield, John


Stewart, Andrew (Sherwood)
Whitney, Raymond


Stewart, Ian (N Hertf'dshire)
Wiggin, Jerry


Stokes, John
Wilkinson, John


Stradling Thomas, J.
Wolfson, Mark


Sumberg, David
Wood, Timothy


Taylor, John (Solihull)
Woodcock, Michael


Taylor, Teddy (S'end E)
Young, Sir George (Acton)


Tebbit, Rt Hon Norman
Younger, Rt Hon George


Thatcher, Rt Hon Mrs M.



Thomas, Rt Hon Peter
Tellers for the Noes:


Thompson, Donald (Calder V)
Mr. Robert Boscawen and


Thompson, Patrick (N'ich N)
Mr. Carol Mather


Thorne, Neil (Ilford S)

Question accordingly negatived.

Main Question Put:—

The House divided: Ayes 335, Noes 196.

Division No. 242]
10.13 pm


AYES


Adley, Robert
Brooke, Hon Peter


Aitken, Jonathan
Brown, M. (Brigg &amp; Cl'thpes)


Alexander, Richard
Browne, John


Alison, Rt Hon Michael
Bruinvels, Peter


Amery, Rt Hon Julian
Bryan, Sir Paul


Amess, David
Buchanan-Smith, Rt Hon A.


Ancram, Michael
Buck, Sir Antony


Arnold, Tom
Budgen, Nick


Ashby, David
Burt, Alistair


Aspinwall, Jack
Butcher, John


Atkins, Rt Hon Sir H.
Butler, Hon Adam


Atkins, Robert (South Ribble)
Butterfill, John


Baker, Rt Hon K. (Mole Vall'y)
Carlisle, John (N Luton)


Baker, Nicholas (N Dorset)
Carlisle, Kenneth (Lincoln)


Baldry, Tony
Carlisle, Rt Hon M. (W'ton S)


Banks, Robert (Harrogate)
Cash, William


Batiste, Spencer
Chalker, Mrs Lynda


Beaumont-Dark, Anthony
Channon, Rt Hon Paul


Bellingham, Henry
Chope, Christopher


Bendall, Vivian
Churchill, W. S.


Benyon, William
Clark, Hon A. (Plym'th S'n)


Best, Keith
Clark, Dr Michael (Rochford)


Biffen, Rt Hon John
Clark, Sir W. (Croydon S)


Biggs-Davison, Sir John
Clarke, Rt Hon K. (Rushcliffe)


Blackburn, John
Clegg, Sir Walter


Body, Richard
Cockeram, Eric


Bonsor, Sir Nicholas
Colvin, Michael


Bottomley, Peter
Cope, John


Bottomley, Mrs Virginia
Cormack, Patrick


Bowden, Gerald (Dulwich)
Couchman, James


Braine, Rt Hon Sir Bernard
Cranborne, Viscount


Brandon-Bravo, Martin
Crouch, David


Bright, Graham
Currie, Mrs Edwina


Brinton, Tim
Dickens, Geoffrey


Brittan, Rt Hon Leon
Dicks, Terry





Dorrell, Stephen
Hubbard-Miles, Peter


Douglas-Hamilton, Lord J.
Hunt, John (Ravensbourne)


Dover, Den
Jackson, Robert


du Cann, Rt Hon Sir Edward
Jessel, Toby


Dunn, Robert
Johnson Smith, Sir Geoffrey


Durant, Tony
Jones, Gwilym (Cardiff N)


Dykes, Hugh
Jones, Robert (W Herts)


Edwards, Rt Hon N. (P'broke)
Jopling, Rt Hon Michael


Eggar, Tim
Joseph, Rt Hon Sir Keith


Emery, Sir Peter
Kershaw, Sir Anthony


Evennett, David
Key, Robert


Eyre, Sir Reginald
King, Roger (B'ham N'field)


Fallon, Michael
King, Rt Hon Tom


Farr, Sir John
Knight, Gregory (Derby N)


Favell, Anthony
Knowles, Michael


Fenner, Mrs Peggy
Knox, David


Finsberg, Sir Geoffrey
Lamont, Norman


Fletcher, Alexander
Lang, Ian


Fookes, Miss Janet
Latham, Michael


Forman, Nigel
Lawler, Geoffrey


Forsyth, Michael (Stirling)
Lawrence, Ivan


Forth, Eric
Lawson, Rt Hon Nigel


Fowler, Rt Hon Norman
Lee, John (Pendle)


Fox, Marcus
Leigh, Edward (Gainsbor'gh)


Franks, Cecil
Lennox-Boyd, Hon Mark


Fraser, Peter (Angus East)
Lewis, Sir Kenneth (Stamf'd)


Freeman, Roger
Lightbown, David


Fry, Peter
Lilley, Peter


Gale, Roger
Lloyd, Ian (Havant)


Galley, Roy
Lloyd, Peter, (Fareham)


Gardiner, George (Reigate)
Lord, Michael


Gardner, Sir Edward (Fylde)
Luce, Richard


Garel-Jones, Tristan
Lyell, Nicholas


Gilmour, Rt Hon Sir Ian
McCrindle, Robert


Glyn, Dr Alan
McCurley, Mrs Anna


Goodhart, Sir Philip
Macfarlane, Neil


Goodlad, Alastair
MacGregor, John


Gorst, John
MacKay, Andrew (Berkshire)


Gow, Ian
MacKay, John (Argyll &amp; Bute)


Gower, Sir Raymond
Maclean, David John


Grant, Sir Anthony
McNair-Wilson, P. (New F'st)


Gregory, Conal
Madel, David


Griffiths, Sir Eldon
Major, John


Griffiths, Peter (Portsm'th N)
Malins, Humfrey


Grist, Ian
Malone, Gerald


Ground, Patrick
Maples, John


Grylls, Michael
Marland, Paul


Gummer, John Selwyn
Marlow, Antony


Hamilton, Neil (Tatton)
Marshall, Michael (Arundel)


Hampson, Dr Keith
Mates, Michael


Hanley, Jeremy
Maude, Hon Francis


Hannam, John
Maxwell-Hyslop, Robin


Hargreaves, Kenneth
Mayhew, Sir Patrick


Harris. David
Mellor, David


Harvey, Robert
Merchant, Piers


Haselhurst, Alan
Meyer, Sir Anthony


Havers, Rt Hon Sir Michael
Miller, Hal (B'grove)


Hawkins, Sir Paul (SW N'folk)
Mills, Iain (Meriden)


Hawksley, Warren
Mills, Sir Peter (West Devon)


Hayhoe, Rt Hon Barney
Miscampbell, Norman


Hayward, Robert
Mitchell, David (NW Hants)


Heath, Rt Hon Edward
Moate, Roger


Heathcoat-Amory, David
Montgomery, Sir Fergus


Heddle, John
Moore, John


Henderson, Barry
Morris, M. (N'hampton, S)


Heseltine, Rt Hon Michael
Morrison, Hon C. (Devizes)


Hickmet, Richard
Morrison, Hon P. (Chester)


Hicks, Robert
Moynihan, Hon C.


Higgins, Rt Hon Terence L.
Neale, Gerrard


Hind, Kenneth
Needham, Richard


Hirst, Michael
Nelson, Anthony


Hogg, Hon Douglas (Gr'th'm)
Neubert, Michael


Holland, Sir Philip (Gedling)
Newton, Tony


Holt, Richard
Nicholls, Patrick


Hordern, Sir Peter
Normanton, Tom


Howard, Michael
Norris, Steven


Howarth, Alan (Stratf'd-on-A)
Onslow, Cranley


Howarth, Gerald (Cannock)
Oppenheim, Phillip


Howell, Rt Hon D. (G'ldford)
Oppenheim, Rt Hon Mrs S.


Howell, Ralph (N Norfolk)
Osborn, Sir John






Ottaway, Richard
Stanley, John


Page, Sir John (Harrow W)
Steen, Anthony


Page, Richard (Herts SW)
Stern, Michael


Parkinson, Rt Hon Cecil
Stevens, Lewis (Nuneaton)


Parris, Matthew
Stewart, Allan (Eastwood)


Patten, J. (Oxf W &amp; Abdgn)
Stewart, Andrew (Sherwood)


Pattie, Geoffrey
Stewart, Ian (N Hertf'dshire)


Pawsey, James
Stokes, John


Peacock, Mrs Elizabeth
Stradling Thomas, J.


Percival, Rt Hon Sir Ian
Sumberg, David


Pollock, Alexander
Taylor, John (Solihull)


Porter, Barry
Taylor, Teddy (S'end E)


Portillo, Michael
Tebbit, Rt Hon Norman


Powell, William (Corby)
Thatcher, Rt Hon Mrs M.


Powley, John
Thomas, Rt Hon Peter


Prentice, Rt Hon Reg
Thompson, Donald (Calder V)


Price, Sir David
Thompson, Patrick (N'ich N)


Prior, Rt Hon James
Thorne, Neil (Ilford S)


Proctor, K. Harvey
Thurnham, Peter


Pym, Rt Hon Francis
Townend, John (Bridlington)


Rathbone, Tim
Townsend, Cyril D. (B'heath)


Rees, Rt Hon Peter (Dover)
Tracey, Richard


Renton, Tim
Trippier, David


Rhodes James, Robert
Trotter, Neville


Rhys Williams, Sir Brandon
Twinn, Dr Ian


Ridley, Rt Hon Nicholas
Vaughan, Sir Gerard


Ridsdale, Sir Julian
Viggers, Peter


Rifkind, Malcolm
Waddington, David


Rippon, Rt Hon Geoffrey
Wakeham, Rt Hon John


Roberts, Wyn (Conwy)
Walden, George


Roe, Mrs Marion
Walker, Bill (T'side N)


Rossi, Sir Hugh
Walker, Rt Hon P. (W'cester)


Rost, Peter
Walters, Dennis


Rowe, Andrew
Ward, John


Ryder, Richard
Wardle, C. (Bexhill)


Sackville, Hon Thomas
Warren, Kenneth


Sainsbury, Hon Timothy
Watson, John


St. John-Stevas, Rt Hon N.
Watts, John


Sayeed, Jonathan
Wells, Bowen (Hertford)


Shaw, Giles (Pudsey)
Wells, Sir John (Maidstone)


Shaw, Sir Michael (Scarb')
Wheeler, John


Shepherd, Colin (Hereford)
Whitfield, John


Shepherd, Richard (Aldridge)
Whitney, Raymond


Silvester, Fred
Wiggin, Jerry


Skeet, T. H. H.
Wilkinson, John


Smith, Tim (Beaconsfield)
Wolfson, Mark


Soames, Hon Nicholas
Wood, Timothy


Speed, Keith
Woodcock, Michael


Speller, Tony
Young, Sir George (Acton)


Spencer, Derek
Younger, Rt Hon George


Spicer, Jim (W Dorset)



Spicer, Michael (S Worcs)
Tellers for the Ayes:


Squire, Robin
Mr. Carol Mather and


Stanbrook, Ivor
Mr. Robert Boscawen.


NOES


Abse, Leo
Brown, N. (N'c'tle-u-Tyne E)


Alton, David
Brown, R. (N'c'tle-u-Tyne N)


Anderson, Donald
Brown, Ron (E'burgh, Leith)


Archer, Rt Hon Peter
Bruce, Malcolm


Ashley, Rt Hon Jack
Buchan, Norman


Ashton, Joe
Caborn, Richard


Atkinson, N. (Tottenham)
Callaghan, Rt Hon J.


Bagier, Gordon A. T.
Campbell, Ian


Banks, Tony (Newham NW)
Carlile, Alexander (Montg'y)


Barnett, Guy
Carter-Jones, Lewis


Barron, Kevin
Cartwright, John


Beckett, Mrs Margaret
Clark, Dr David (S Shields)


Beith, A. J.
Clarke, Thomas


Bell, Stuart
Clay, Robert


Benn, Tony
Clwyd, Mrs Ann


Bennett, A. (Dent'n &amp; Red'sh)
Cocks, Rt Hon M. (Bristol S.)


Bermingham, Gerald
Cohen, Harry


Bidwell, Sydney
Concannon, Rt Hon J. D.


Blair, Anthony
Cook, Frank (Stockton North)


Boothroyd, Miss Betty
Cook, Robin F. (Livingston)


Boyes, Roland
Corbett, Robin


Bray, Dr Jeremy
Corbyn, Jeremy


Brown, Gordon (D'f'mline E)
Cowans, Harry


Brown, Hugh D. (Provan)
Cox, Thomas (Tooting)





Craigen, J. M.
Martin, Michael


Crowther, Stan
Mason, Rt Hon Roy


Cunliffe, Lawrence
Maxton, John


Cunningham, Dr John
Maynard, Miss Joan


Davies, Rt Hon Denzil (L'lli)
Meacher, Michael


Davies, Ronald (Caerphilly)
Meadowcroft, Michael


Davis, Terry (B'ham, H'ge H'l)
Michie, William


Deakins, Eric
Mikardo, Ian


Dewar, Donald
Millan, Rt Hon Bruce


Dixon, Donald
Miller, Dr M. S. (E Kilbride)


Dobson, Frank
Morris, Rt Hon A. (W'shawe)


Dormand, Jack
Morris, Rt Hon J. (Aberavon)


Douglas, Dick
Nellist, David


Duffy, A. E. P.
Oakes, Rt. Hon Gordon


Eastham, Ken
O'Brien, William


Edwards, Bob (W'h'mpt'n SE)
O'Neill, Martin


Ellis, Raymond
Orme, Rt Hon Stanley


Evans, John (St. Helens N)
Owen, Rt Hon Dr David


Ewing, Harry
Park, George


Faulds, Andrew
Parry, Robert


Field, Frank (Birkenhead)
Patchett, Terry


Fields, T. (L'pool Broad Gn)
Pavitt, Laurie


Fisher, Mark
Pendry, Tom


Foot, Rt Hon Michael
Penhaligon, David


Foster, Derek
Pike, Peter


Foulkes, George
Powell, Raymond (Ogmore)


Fraser, J. (Norwood)
Prescott, John


Freud, Clement
Radice, Giles


Garrett, W. E.
Randall, Stuart


George, Bruce
Redmond, M.


Gilbert, Rt Hon Dr John
Rees, Rt Hon M. (Leeds S)


Godman, Dr Norman
Richardson, Ms Jo


Golding, John
Roberts, Allan (Bootle)


Gould, Bryan
Roberts, Ernest (Hackney N)


Gourlay, Harry
Robertson, George


Hamilton, James (M'well N)
Rooker, J. W.


Hancock, Mr. Michael
Ross, Stephen (Isle of Wight)


Hardy, Peter
Rowlands, Ted


Harman, Ms Harriet
Ryman, John


Hart, Rt Hon Dame Judith
Sedgemore, Brian


Hattersley, Rt Hon Roy
Sheerman, Barry


Healey, Rt Hon Denis
Sheldon, Rt Hon R.


Heffer, Eric S.
Short, Ms Clare (Ladywood)


Hogg, N. (C'nauld &amp; Kilsyth)
Short, Mrs R.(W'hampt n NE)


Home Robertson, John
Silkin, Rt Hon J.


Howell, Rt Hon D. (S'heath)
Skinner, Dennis


Hoyle, Douglas
Smith, C.(Isl'ton S &amp; F'bury)


Hughes, Dr. Mark (Durham)
Smith, Rt Hon J. (M'kl'ds E)


Hughes, Robert (Aberdeen N)
Snape, Peter


Hume, John
Soley, Clive


Janner, Hon Greville
Spearing, Nigel


Jenkins, Rt Hon Roy (Hillh'd)
Stewart, Rt Hon D. (W Isles)


John, Brynmor
Stott, Roger


Kennedy, Charles
Strang, Gavin


Kilroy-Silk, Robert
Straw, Jack


Kinnock, Rt Hon Neil
Thomas, Dafydd (Merioneth)


Kirkwood, Archy
Thomas, Dr R. (Carmarthen)


Lambie, David
Thorne, Stan (Preston)


Lamond, James
Tinn, James


Leadbitter, Ted
Wainwright, R.


Leighton, Ronald
Wallace, James


Lewis, Ron (Carlisle)
Wardell, Gareth (Gower)


Lewis, Terence (Worsley)
Wareing, Robert


Litherland, Robert
Welsh, Michael


Lloyd, Tony (Stretford)
White, James


McCartney, Hugh
Wigley, Dafydd


McDonald, Dr Oonagh
Williams, Rt Hon A.


McGuire, Michael
Wilson, Gordon


McKay, Allen (Penistone)
Winnick, David


McKelvey, William
Woodall, Alec


MacKenzie, Rt Hon Gregor
Wrigglesworth, Ian


Maclennan, Robert
Young, David (Bolton SE)


McNamara, Kevin



McTaggart, Robert
Tellers for the Noes


McWilliam, John
Mr. Frank Haynes and


Madden, Max
Mr. Derek Fatchett

Question accordingly agreed to.

Resolved,

That this House welcomes the Government's Green Paper, Reform of Social Security, Cmnd. 9517–9; and endorses the Government's aims of achieving a better social security system which would direct help to the people who need it most, make the benefit system simpler to understand and run, base pensions on a partnership between the state and individuals, and put social security on a sound basis which the country can afford.

EUROPEAN LEGISLATION

Ordered,

That Mr. Bryan Gould be discharged from the Select Committee on European Legislation and Mr. Roland Boyes be added to the Committee.—[Mr. Lennox-Boyd.]

Smith Houses (West Bromwich)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]

Miss Betty Boothroyd: I want to begin this evening by congratulating the Parliamentary Under-Secretary, who I believe is to respond to my Adjournment debate. I understand that this is his 110th Adjournment debate since he first became a Minister. I have to say to him that, unless his Department is more conciliatory in amending the Housing Defects Act 1984, it will probably be his 510th Adjournment debate by the end of this parliamentary Session.
Late last week I met about 250 constituents in West Bromwich. All of them are owners of Smith houses. All of them bought their houses in good faith. Some of those families bought their houses many years ago under local schemes; others bought more recently under the Government's right to buy.
The one feeling all Smith owners have in common is the deep sense of injustice at the Government's refusal to put Smith-built properties in the Housing Defects Act, and they expressed to me, as they have done over very many months, their worries and their concerns about their future and the life savings which have gone into investing in home ownership.
Housing problems are not new to those of us in West Bromwich. The council has been crippled by savage reductions in its housing investment programme over the years. At a time when there are some 6,000 families waiting to be housed or rehoused, the authority is not even allowed to spend its own income from the sale of houses to make provision for these families. The last thing that we need in West Bromwich is to exacerbate an already poor situation, yet that is what the Minister has done.
In West Bromwich, West, my constituency, 189 families own Smith houses. Some 650 are left in council ownership. In the borough of Sandwell as a whole, there are 1,086 Smith properties, of which 273 are privately owned.
In referring to defective housing, the Minister for Housing and Construction spoke of the findings of the Building Research Establishment and the difficult position in which owners would find themselves. In November 1983, he said:
The Government have decided to introduce early legislation to provide a scheme of assistance to private owners of houses sold by the public sector and since found to be defective or potentially defective."—[Official Report, 10 November 1983; Vol. 48, c. 420–1.]
That statement gave a ray of hope. It was especially reassuring a month later when the report concluded that Smith houses suffer from some defects. The Minister for Housing and Construction confirmed that conclusion to me by letter only last month.
Let me make it clear that I am not referring to the shale-filled houses in Birmingham. There are no shale-filled properties in Sandwell. I am speaking of constituents who own Smith houses, some of which exhibit defects because of cracking between wall units, which is due to changes in temperature and humidity, or some which may be found to be potentially defective.
But the hope that the Minister inspired faded when owners found that their homes were not to be included in the legislation and they were not to receive equal treatment


with others in the same position. Tonight, I wish to direct the Minister's attention to his legislation and to show where I believe that, under two criteria to be met under section 1 of the Act, he is failing in his duty. Subsection (a) gives the Secretary of State powers to designate if
buildings … are defective by reason of their design or construction.
That language is plain enough. The Building Research Establishment's findings conclude that Smith houses suffer from some defects, and the Minister confirmed that. Yet, despite all that, the Minister consistently refuses to enact his own legislation and include those buildings in the national scheme.
The second criterion to which I wish to draw the Minister's attention lies in subsection (b). That empowers him to designate when defects,
having become generally known, the value of some"—
the word "some" is the operative word—
or all of the dwellings concerned has been substantially reduced.
I am delighted that not all properties have been substantially reduced in value, but some have. Therefore, the criterion that some of them have been affected is met. It is implicit in the BRE report and the Minister's acknowledgement, and it is now for him to operate the Act in favour of Smith homes.
May I put to the Minister the position in relation to building societies. To be consistently denied the assistance of the national scheme has caused some building societies, as I am sure the Minister is aware, to refuse lending facilities. The attitude of some major lending institutions —indeed, the attitude of the West Bromwich building society itself—is blighting by reputation the value of even reasonably adequate property, and it is causing great distress to those owners. Real human problems exist because of the refusal of mortgage loans.
The Minister for Housing and Construction was not at all helpful when he wrote to me only a few weeks ago, saying that lending is a matter in which he cannot intervene. I remind him that he has had discussions with the Building Societies Association on other occasions about such matters, and I remind him that a Minister for Housing in a previous Labour Government intervened firmly with the building societies at one stage. If it could be done on earlier occasions, he can do so now. It is not a matter from which he can remain aloof. He must seek the co-operation of the building societies now, and he must restore lost confidence through an approved national scheme.
Why does the Minister insist that this is a local issue to be left to local councils to deal with? It is not a local issue. The Minister's answers to my questions, and to questions from some of my hon. Friends, show that Smith houses exist in a dozen areas of the country. We know that the BRE report showed that approximately 4,500 such houses have been built. The families who have bought those houses cannot be dealt with by a different, fragmented approach whereby each local authority is left to determine its response to reinstatement grants. It is a national problem, and it is incumbent on the Minister to acknowledge the scale of the problem and not to abnegate responsibility, which I believe he is doing.
Where is the answer that I give to my constituents for whom reinstatement grants are insufficient to meet their need and who require the council to repurchase the property? As the Minister knows, repurchase of the

property would have to be done without recompense. What practical help do I offer to a young couple, encouraged by the Government under the right to buy, who did buy? Subsequently the husband lost his job. He followed another Minister's advice, got on his bike and found a job—he was one of the lucky ones—100 miles away. His wife told me last week that their marriage is on the rocks because of the long separation caused because she cannot sell the house and join her husband, who is in lodgings earning a living elsewhere.
What am Ito tell solicitors wo are dealing with delicate family matters where Smith property has to be disposed of and there are no buyers? How does the Minister suggest I respond to elderly couples who bought their homes some 20 years ago in good faith, with the dream of spending their retirement in greener surroundings, and who want to move from the industrialised area in which they have lived all their lives? They are heartbroken because they cannot sell their homes and move, as they had always planned.
None of these people can sell their adequately sound property because that property has become clouded by reputation. It is for the Government to lift that cloud. Sandwell council cannot do it. It cannot repurchase under the present provisions with no recompense. Even if it tried to do so, it would cost something like £3 million and would swallow nearly a quarter of my council's housing investment allocation.
It is for the Minister to understand the human problems that this is causing. The Minister for Housing and Construction may have found on his desk this morning representations from me asking him to meet some of those constituents—not all 250 of them, of course—that I met only last week. I have asked him to meet a deputation of them. I hope that he will respond positively and see them within the next few weeks.
Let me just remind the Minister that even in the days of full employment in my area of the Black Country it was never an area of high wages. People did not have money to throw about. Those who managed to save put those savings into home ownership. Today there are wards in my constituency of West Bromwich where Smith houses exist and have been bought by people, and where now 22 per cent. of the working population is out of a job. Many of those people who have been made redundant put their redundancy money into investment in their homes. Why should they now be denied the advantages offered to others under the Act?
All I am asking is that the Minister should deal with them even-handedly and that the national scheme be made available to those who own Smith properties, because the same position obtains. Surely the Minister must accept that natural justice demands to be done, and I want no less for those people I represent.

The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The hon. Member for West Bromwich, West (Miss Boothroyd) has spoken movingly about the problems facing a number of her constituents who bought Smith houses from the local authority. They now face a range of problems because they find that they cannot sell them because the purchaser cannot obtain a mortgage.
One cannot feel anything but sympathy for the case that the hon. Lady mentioned of the husband who has found a job elsewhere and whose family cannot join him because


of difficulty in selling the family home. I hope that some of the things that I say about the role of the building societies will be of help to that couple. The hon. Lady also asked whether I would meet a deputation of tenants. I wonder whether she meant tenants, because during most of her remarks she was speaking about owner-occupiers.

Miss Boothroyd: indicated assent.

Sir George Young: I understand that the hon. Lady meant the owner-occupiers. I have not seen the letter that she mentioned, but I hope to respond positively.
I wish to put the problem into a broad perspective. Until the Government introduced the Housing Defects Act 1984, there was no protection for anyone who had bought a house from a local authority or a public body and who found, through no fault of his or hers, that its value had depreciated. I believe that the hon. Lady commends what we did in that Act. Her complaint is that we have not extended the provisions of clause 1 to the owners of Smith houses, who are mainly in the west Midlands but also in south Wales. The Government of course understand the problems and we should like to do what we can to to help.
On 25 May last year, my hon. Friend the Minister for Housing and Construction visited Birmingham where most of the publicly and privately owned Smith houses are located. He saw at first hand the problems facing all Smith house owners and discussed them with the owners. He also met hon. Members representing Birmingham constituencies, and city officials.
We are well aware of the problems facing Smith house owners in other areas, including Sandwell, and we are grateful to those hon. Members who have kept us closely informed on the subject of Smith houses in their areas. My Department's regional office is in regular contact with officers from Sandwell borough council and has visited a number of the council's estates, including one with Smith houses on which the authority is undertaking a programme of repairs. However, it is fair to say that the houses in Birmingham, as the hon. Lady admitted, have special problems happily not replicated in Sandwell, which I shall try to explain in the course of the debate.
I shall begin by trying to clear up one or two misunderstandings about Smith houses. I should like to take the opportunity to repeat that the problems which have arisen in Smith houses are not the same as those identified in prefabricated reinforced concrete houses designed before 1960, which are, as far as we are aware, the only houses known to meet the criteria for designation under section 1 of the Housing Defects Act 1984.
About 4,500 Smith houses were built in England and Wales, and they can be found not just in the hon. Lady's constituency at Sandwell, and in Birmingham but also in other areas of the west and east Midlands, and in south Wales.
The Smith house presents the appearance of a conventional brick house but is in fact built of large concrete blocks. Although some steel was placed in the blocks for handling purposes, that is structurally redundant. The construction is therefore different from those prefabricated reinforced concrete dwellings designed before 1960 and designated under section 1 of the Housing Defects Act 1984.
Following reports of cracking in the walls and floors in some houses, the Building Research Establishment was

asked to investigate Smith houses. As part of its investigation it inspected in detail three houses in the city of Birmingham, and one house each in Cardiff, Erewash and Amber Valley, and examined a further 25 houses in those areas.
The BRE's report on the structural condition of Smith houses was published in December 1983, and it concluded that they suffer from some defects. Since construction, the large concrete blocks will have been subject to continuous movement with changes in temperature and humidity, and most Smith houses show some cracking at the junctions between the blocks and between external and partition walls. Although that may be unsightly, it should present no risk to the stability of the house if repairs which may from time to time be necessary are carried out properly.
So far as my Department knows, those movements have not led to any failure. Corrosion of the steel placed in the blocks for handling purposes could cause local cracking in the blocks, but again there is no evidence to suggest that that will lead to serious structural damage.
The BRE also found that some, but not all, Smith houses in the city of Birmingham are seriously defective because of the use of shale fill in their foundations. As far as is known, shale fill was used in Smith houses only in Birmingham, and the consequent defects are not inherent in Smith houses in Sandwell or in any other areas, as the hon. Lady said.
Designation entitles owners of the houses concerned to seek financial assistance by way of a grant towards the repair of the houses or, in certain cases, by repurchase. Under the Housing Defects Act 1984, dwellings may be designated for assistance only if, as a class, they are defective by reason of their design or construction and, by reason of the defects becoming generally known, they have suffered a substantial loss in value. Under section 1, a designation by the Secretary of State must include all houses of the type concerned in the country.
The second condition is the source of difficulty. Although some Smith houses in the city of Birmingham have suffered a substantial fall in value, my Department has no evidence that this is true of Smith houses in the country generally. If the hon. Lady is able to collect any evidence, which she can make available to my Department, that section 1(1)(b) is also true—that the value of some or all of the dwellings concerned has been substantially reduced — we shall consider the matter afresh. At the moment we do not have that evidence, which is why we maintain that my right hon. Friend should not designate Smith houses under section 1. The problem is different in Birmingham, where there is a serious problem resulting from shale fill. A local estate agent or residents association might be able to collect the evidence.
As for local designation, under section 12 it is open to local authorities to designate dwellings in their area, subject to the Secretary of State's approval, if they are satisfied that they meet the criteria which I have mentioned. This will help when there are local problems such as those experienced in Birmingham. If a local authority decides to designate Smith houses in its area, owners who are eligible will be entitled to assistance in the same way as they would be when a designation is made by the Secretary of State. It was not quite clear from what the hon. Lady said whether the local authority intends to apply for designation under section 12. Perhaps she wants to pursue that matter with the local authority.
Mortgageability is at the heart of the problem. Having listened to the hon. Lady, I understand the problems that owners of Smith houses are having. I understand that some building societies in the west midlands are prepared to lend on Smith houses, subject to a satisfactory structural report. I hope that that will ease some of the problems being faced by the hon. Lady's constituents, not least the couple she mentioned. I hope that, subject to a structural survey and, if necessary, some part of the advance being retained until any necessary repairs had been done, societies would be prepared to treat Smith houses like any other property offered as security for a mortgage loan.
I regret that other societies are not prepared to lend at all on this type of house. Although lending is a matter for the societies concerned and not one in which the Government intervene directly, I must say that I was disappointed to learn of the attitude which some building societies have adopted in respect of dwellings of non-traditional design. If the hon. Lady is able to let me see letters from building societies which have been contacted by her constituents and which flatly turn down any advance on Smith houses, I shall look at them and see if any pressure might be brought to bear discreetly on building societies to reconsider.
I am anxious that the problems associated with the pre-1960 PRC types which I have mentioned may have blighted other types of construction. It is important to re-emphasise that the types are distinct. The problems found in Smith houses in Birmingham should not lead building societies to cease lending on Smith houses generally.
The hon. Lady mentioned resources available to local authorities and said that Sandwell does not have the financial resources necessary to help owners of properties already designated under the Housing Defects Act or any future designation of Smith houses. She is aware of the system of Exchequer contributions to local authority expenditure under the Housing Defects Act.
In respect of the reinstatement grants, whether in pursuance of a designation made nationally or locally, the contribution is 90 per cent. of the annual loan charges on the amount of the grant. In respect of repurchase in pursuance of a designation made nationally by the Secretary of State, the contribution will generally be 75 per cent. of the price paid by the authority for the acquisition of the dwelling, plus any amount reimbursed

to the owner for legal costs. Where the property was previously sold by another public authority and not the local authority which is repurchasing it, the percentage contribution will be increased to 100 per cent. However, there are no contributions towards expenditure on repurchasing dwellings in pursuance of a local designation by a local authority.
Regarding the allocation of resources, we took into account local authorities' expenditure under the Act when we made the housing investment programme allocations for 1985–86. Furthermore, my right hon. Friend the Secretary of State announced in the House on 13 March that he was prepared to consider sympathetically applications from local authorities which would have particular difficulty in meeting their obligations under the Housing Defects Act.
In general, authorities are expected, as usual, to order their priorities so as to discharge their commitments within the limits on their prescribed expenditure. But some authorities have argued that, because of other commitments, they cannot meet their obligations under the 1984 Act in 1985–86 within their total power to spend. In such cases, additional allocations will be considered to cover some of the costs involved in repurchase or making reinstatement grants during 1985–86. My Department has received more than 100 applications. Sandwell is one of the authorities which has submitted a bid for an additional allocation, and we shall give that careful consideration. We hope to come to a conclusion next month on how the applications will be processed. I can confirm that, on future expenditure, local authorities' expenditure under the Act will be fully taken into account in the HIP allocations.
The hon. Lady requested a meeting. When I have seen her letter, I hope to respond sympathetically, but before that meeting she may like to assemble some of the information that I have outlined, such as information on valuations on the properties and on the lending practices of building societies. If she comes armed with that, I shall see what I can do to help the constituents for whore she has spoken.

Question put and agreed to.

Adjourned accordingly at eight minutes to Eleven o'clock.